shw annual report 2015 v2 - shaw communications - bundles · pdf fileuncertainties”. the...

2015 Annual Report

1 Report to Shareholders

3 Management’s Discussion and Analysis

51 Management’s Responsibility for Financial Statements and Report on Internal Control over Financial Reporting

53 Independant Auditors’ Reports

55 Consolidated Financial Statements

106 Shareholders’ Information

107 Corporate Information

The Annual General Meeting of Shareholders will be held on January 14, 2016 at 11:00 am(Mountain Time) at Shaw Court, 630 – 3rd Avenue SW, Calgary, Alberta.

Shaw Communications Inc.Report to ShareholdersAugust 31, 2015

Dear Fellow Shareholders,

We are pleased to report solid fiscal 2015 results, a reflection of our commitment to customer service, focus on operationalexcellence and sound financial management for our shareholders.

Transformation in the Canadian communications sector continued through fiscal 2015 and we embrace the challenges andopportunities presented by evolving consumer preferences, regulatory change, technological advances and adjustments in theCanadian economy. We are genuinely excited about the possibilities for our customers and our business for many years to come.

From Shaw’s earliest days, we understood that delivering excellent products and customer service is fundamental to our growthand success. We are proud of the progress we have made to drive excellence in the ways we organize, plan and execute ourstrategy to achieve our corporate and operational goals. Guiding our operations and all of our decisions is our commitment todelivering exceptional experiences to our customers and viewers.

Operations

In 2015, our Consumer division took a major step forward by reorganizing our customer care operations into seven nationalcentres of expertise – in Victoria, Nanaimo, Vancouver, Kelowna, Winnipeg, Mississauga and Montreal. This realignment adoptsglobal best practices and enables us to specialize our knowledge, expertise, training, management and other processes to betterserve our customers.

Our shomi joint venture with Rogers Communications to provide subscription based streaming video on demand was madeavailable to all Canadians in 2015. Our work to provide more entertainment choices for customers continues in 2016 as wework closely with partners at Comcast to be the first to bring their market leading cloud-based X1 platform to Canadian viewers.X1 offers a seamless viewing experience across multiple screens and devices – both in and out of the home. We are planning toroll out X1 to our customers through 2016.

We are constantly investing in our network. As people embrace the power of new technology – whether through personaldevices, smart home features or new gadgets and tools still on the horizon – the demands on our hybrid fibre-coax networkincrease. We are committed to enhancing our broadband performance in 2016 through the technology provided by the DOCSIS3.1 protocol – known as Gigasphere. We know that we are now just scratching the surface of what our network is capable of andwe have a plan that will continue to deliver the speed and capacity that our customers want today and into the future. Ourpromise is simple: our customers will always be ready and always be connected so they never miss a thing.

Shaw Go WiFi is a valued extension of our network that now has nearly 75,000 access points across western Canada and morethan two million devices registered. We are committed to further extending the reach of our network so our customers canconnect outside the home.

We also made changes in 2015 to improve the performance of our Media division and transform it from a traditionalbroadcaster to a broader media company. In the shifting global media landscape, success is defined by the ability to engage inand monetize content across all platforms. Our Media team is exploring a number of next generation advertising solutions toensure that our offering evolves with the expectations of our advertising clients.

Growth

Our plans for growth are robust, yet disciplined. They are designed to ensure that we are making prudent moves andinvestments to ensure we retain our leadership in the marketplace and create value for our shareholders.

Business Infrastructure Services continues to capitalize on opportunities in its sector. ViaWest extended its reach with therecent opening of new facilities in Oregon and Calgary, and its recently announced move into the eastern U.S. with theacquisition of INetU and its facility in Pennsylvania.

We continue to address significant opportunities that we see in Business Network Services by strengthening our position as avalued advisor to small and medium sized businesses, and promoting our value proposition to “Grow your business with ShawBusiness.” Notably, in 2015 we worked with a number of global vendor partners to launch our “Smart” suite of flexible andeasy to use managed business communications solutions.

2015 Annual Report Shaw Communications Inc. 1

Shaw Communications Inc.Report to ShareholdersAugust 31, 2015

People

We are proud to support organizations that promote the communities where we work and live. In fiscal 2015, Shaw contributedapproximately $60 million in cash and in-kind contributions to charitable and community organizations that work to make ourneighbourhoods and cities better. Approximately 80% of this amount went to our multiple partnerships that benefit kids andyouth-focused charities under the Shaw Kids Investment Program (SKIP).

Every day, our more than 14,000 employees come to work and serve our customers, viewers and our communities the very bestway they can. They deliver time and time again, and we thank them for contributing to the success of our Company. We wouldalso like to commend our management team for their commitment to our customers and their ongoing leadership and thank themembers of our Board of Directors for their valued guidance, wisdom and insight.

Finally, we acknowledge the steady hand, sage counsel and unwavering support of Louis A. Desrochers, who passed awaypeacefully September 28, 2015. Louis was appointed Honourary Corporate Secretary for life in 1998, following decades ofproviding Shaw with excellent advice, including navigating our first licence application to the CRTC in 1970. We are lucky tohave worked so closely with him and to have gained so much from his friendship.

[Signed] [Signed]

JR ShawExecutive Chair

Bradley S. ShawChief Executive Officer

2 Shaw Communications Inc. 2015 Annual Report

Shaw Communications Inc.Management’s Discussion and AnalysisAugust 31, 2015

November 23, 2015

Forward

Tabular dollar amounts are in millions of Canadian dollars, except per share amounts or unless otherwise indicated. ThisManagement’s Discussion and Analysis should be read in conjunction with the Consolidated Financial Statements. The terms“we,” “us,” “our,” “Shaw” and “the Company” refer to Shaw Communications Inc. and, as applicable, Shaw CommunicationsInc. and its direct and indirect subsidiaries as a group.

Caution Concerning Forward Looking Statements

Statements included in this Management’s Discussion and Analysis that are not historic constitute “forward-lookingstatements” within the meaning of applicable securities laws. Such statements include, but are not limited to, statementsabout future capital expenditures, acquisitions and dispositions, financial guidance for future performance, business strategiesand measures to implement strategies, competitive strengths, expansion and growth of Shaw’s business and operations andother goals and plans. They can generally be identified by words such as “anticipate”, “believe”, “expect”, “plan”, “intend”,“target”, “goal” and similar expressions (although not all forward-looking statements contain such words). All of the forward-looking statements made in this report are qualified by these cautionary statements.

Forward-looking statements are based on assumptions and analyses made by Shaw in light of its experience and its perceptionof historical trends, current conditions and expected future developments as well as other factors it believes are appropriate inthe circumstances as of the current date. These assumptions include, but are not limited to, general economic conditions,interest, income tax and exchange rates, technology deployment, content and equipment costs, industry structure, conditionsand stability, government regulation and the integration of recent acquisitions. Many of these assumptions are confidential.

You should not place undue reliance on any forward-looking statements. Many factors, including those not within Shaw’scontrol, may cause Shaw’s actual results to be materially different from the views expressed or implied by such forward-lookingstatements, including, but not limited to, general economic, market and business conditions; changes in the competitiveenvironment in the markets in which Shaw operates and from the development of new markets for emerging technologies;industry trends and other changing conditions in the entertainment, information and communications industries; Shaw’s abilityto execute its strategic plans; opportunities that may be presented to and pursued by Shaw; changes in laws, regulations anddecisions by regulators that affect Shaw or the markets in which it operates; Shaw’s status as a holding company with separateoperating subsidiaries; and other factors described in this report under the heading “Known events, trends, risks anduncertainties”. The foregoing is not an exhaustive list of all possible factors. Should one or more of these risks materialize, orshould assumptions underlying the forward-looking statements prove incorrect, actual results may vary materially from thosedescribed herein.

The Company provides certain financial guidance for future performance as the Company believes that certain investors,analysts and others utilize this and other forward-looking information in order to assess the Company’s expected operational andfinancial performance and as an indicator of its ability to service debt and return cash to shareholders. The Company’s financialguidance may not be appropriate for this or other purposes.

Any forward-looking statement speaks only as of the date on which it was originally made and, except as required by law, Shawexpressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statement toreflect any change in related assumptions, events, conditions or circumstances.



ABOUT OUR BUSINESS

At Shaw, we are focused to deliver leading network and content experiences for our highly valued customers and viewers.

Š our Consumer team connects consumers in their homes and on the go with broadband Internet, Shaw Go WiFi, video andphone

Š our Business Network Services team enables businesses to focus on their core strategies with a full suite of connectivityand managed services

Š our Business Infrastructure Services team provides hybrid IT solutions, including colocation, managed services, cloudcomputing and security and compliance for North American enterprises

Š our Media team delivers engaging programming to Canadians through dynamic conventional and specialty televisionchannels along with online and over-the-top video platforms

In the following sections we provide select financial highlights and review our strategy, our four divisions, our network and ourpresence in the communities in which we operate.

Shaw is traded on the Toronto Stock Exchange (SJR.B) and the New York Stock Exchange (SJR) and is included in the S&P/TSX60 Index.

Select Financial and Operational Highlights

Through an evolving operating and competitive landscape our consolidated business has delivered stable and profitable resultsin 2015.

Year ended August 31,

(millions of Canadian dollars except per share amounts) 2015 2014Change

%

Operations:Revenue 5,488 5,241 4.7Operating income before restructuring costs and amortization(1) 2,379 2,262 5.2Operating margin(1) 43.3% 43.2% 0.1ptsNet income 880 887 (0.8)

Per share data:Earnings per share

Basic 1.80 1.84 (2.2)Diluted 1.79 1.84 (2.7)

Weighted average participating shares outstanding during period (millions) 468 457Funds flow from operations(2) 1,637 1,524 7.4Free cash flow(1) 653 698 (6.4)

(1) Refer to Key performance drivers.(2) Funds flow from operations is before changes in non-cash working capital balances related to operations as presented in

the Consolidated Statements of Cash Flows.



Subscriber highlightsAugust 31,

2015August 31,

2014 Change

ConsumerVideo – Cable 1,764,523 1,867,304 (102,781)Video – Satellite 811,988 850,132 (38,144)Internet 1,774,374 1,761,881 12,493Phone 1,027,266 1,110,708 (83,442)

5,378,151 5,590,025 (211,874)Business Network Services

Video – Cable 77,709 90,325 (12,616)Video – Satellite 31,435 30,491 944Internet 178,167 168,520 9,647Phone 284,785 264,626 20,159

572,096 553,962 18,134

5,950,247 6,143,987 (193,740)

Our Strategy

Shaw’s corporate strategy places the highest priority on our valued customers and viewers. We have committed to deliver them aleading network and content experience, all centred on our brand promise “Our customers will always be ready and always beconnected so they never miss a thing.”

Our strategy stands on four strategic pillars which we have identified as the foundation for the decisions we make and theactions we take.

1. Exceptional Customer Experience – we continue to invest in our superior service, advanced user-based product andservice design and monitor our performance with daily measurement

2. Leading Technology – we invest in and leverage our network advantage to support emerging technology shifts and addvalue to our core services in order to ensure alignment of our technology platforms with our technology roadmap

3. Customer Profitability – we focus on disciplined pricing strategies, high value customers and retention to drive improvedcustomer outcomes and profit realization

4. Operational Efficiency – we manage our operating expenses and capital investments in order to drive best-in-classbenchmarks for cost structure

Focus to Deliver

With the adoption in 2014 of a program we call “Focus to Deliver” we transformed the way we organize, plan and execute ourbusiness to achieve our corporate and operational strategy. The program is designed to enhance our efficiency and growthpotential by ensuring business decisions are made in accordance with disciplined customer-centric criteria. As a result, allaspects of our operations, including resource allocation, are prioritized for their impact on our valued customers and viewers.



Success Measured

Strategic Projects and the Focus to Deliver Program

ExceptionalCustomer

Experience

OperationalEfficiency

LeadingTechnology

CustomerProfitability

Leading Network and Content Experience

You Won’t Miss a Thing

Our Customers and Viewers

Insp

ired

and

Eng

aged

Em

ploy

ees

Insp

ired

and

Eng

aged

Em

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ees

Adopting Focus to Deliver has driven significant changes at Shaw. In 2014 we:

Š realigned our cable and satellite operations to our current Consumer and Business Network Services divisions to improveoverall efficiency and enhance our ability to grow as the leading network and content experience company

Š combined our Information Technology (“IT”) and Engineering teams to form a single Technology and Network Operationsteam – this new powerful technology team ensures we deliver with greater efficiency and effectiveness in adaptingleading technology to better future proof our network and product offering, all in service of continuing to provide ourcustomers and viewers with leading technology

Š restructured to better align our organization to best serve our corporate strategy, with investments in procurement, supplychain, marketing, pricing, network architecture and next generation products and, as a result, we eliminatedapproximately 400 management and non-customer facing roles

and in 2015 we:

Š announced a realignment of customer care operations to centralize the Consumer division’s knowledge, expertise,training, management and other processes around seven Canadian centres of expertise

Š reorganized our Media operations in order to accelerate our evolution from a traditional broadcaster to a multi-platformmedia business that includes both long and short-form video, branded content, instructional videos, behind-the-scenescontent, web content and social media

People

Focus to Deliver has also driven our ongoing progress to better align compensation of our teams with both corporateperformance relative to our strategic and operational objectives and individual performance. We are enabling this performanceby enhancing training and development for our teams and leadership effectiveness programs for our current and future leaders.Inspiring and engaging our employees to align with our strategy is the cornerstone of our success. We are grateful to haveapproximately 14,000 employees who are committed to delivering an exceptional network and content experience for ourcustomers, viewers and the communities we serve.



Global Technology Leaders

In order to efficiently secure and deliver leading technology for our customers – both for today and tomorrow – we recognize thatwe must join global scale initiatives. This ensures that the technology we adopt and invest in is, and continues to be, a standardfor the communications industry globally. This approach serves all of our strategic pillars.

This new approach allows us to leverage our current assets where we have strength and expertise, while also ensuring ourcapital investments are aligned with industry leaders to support the development, maintenance and advancement of newtechnology where it is impractical for us to do so on a standalone basis. This ensures that there is sufficient capital, resourcesand commitment to continue advances in innovation, performance and reliability of our services and products. In addition, thisstrategic approach to our business gives us the opportunity to better manage costs by participating in purchasing opportunitieson a global scale.

We are pleased to have collaborated this year with global leaders on two significant service offerings:

Š our planned rollout of the TV Everywhere X1 video platform developed by Comcast (see discussion under “Consumer”)Š our “Smart” suite of business services that includes SmartWiFi in collaboration with Cisco’s Meraki and SmartVoice with

Broadsoft (see discussion under “Business Network Services”)

Consumer

2015 2014

(millions of Canadian dollars) $share of

consolidated $share of

consolidated

Revenue 3,752 67%(1) 3,768 70%(1)

Operating income before restructuring costs and amortization(2) 1,686 71% 1,669 74%

(1) Before intersegment eliminations.(2) Refer to Key performance drivers.

Canadians trust Shaw to connect them to excellent network and content experiences. Our Consumer division was formed in2014 by bringing together all of our operations that serve residential customers. These customers are served on two platforms.

Š Network-Connected – we provide broadband Internet, Shaw Go WiFi, video and phone to customers that are connected toour local and regional hybrid fibre-coax network

Š Satellite – we provide video by satellite to customers across Canada

Network-Connected ServicesAs one of the largest providers of residential communications in Canada, Consumer connects families in British Columbia,Alberta, Saskatchewan, Manitoba and Northern Ontario on our hybrid fibre–coax network with broadband Internet, Shaw GoWiFi, video and home phone services to meet their needs at home and on the go.

As our customer needs evolve, we continue to be more flexible with our service offerings. Our customer-centric strategy isdesigned to deliver high-quality customer service, simplicity, value and choice for our customers.



Network-Connected Service Areas

Calgary

Edmonton

Victoria

Okanaganregion

Saskatoon

Regina

Moose Jaw

Swift Current

Prince Albert

Winnipeg Thunder Bay

Sault Ste. Marie

Kenora

Vancouver

InternetEvery day, the Internet influences the way we live and connect with local and global communities. Homes have more connecteddevices with each device using ever greater bandwidth. Our advanced hybrid fibre-coax network offers our residential customersreliable broadband Internet service at levels matched to the data speed, usage and budget that they choose.

In addition, our customers want to be able to experience their Shaw Internet service in the home and on the go. Nearly allcurrent portable consumer communication devices are WiFi enabled. That is why, with Shaw Go WiFi, we have extended thereach and value for our customers of our hybrid fibre-coax network beyond the home and into thecommunities where we work and play. WiFi is a valued addition for our customer experience thatenables our customers to have access to carrier-grade WiFi on the go and as an alternative to mobileservice.

To date, we have over two million devices authenticated to Shaw Go WiFi and almost 75,000 accesspoints with coverage in many high traffic public spaces. We are committed to continuing to makeShaw Go WiFi a meaningful extension of the Shaw network for our consumers on the go. See “Shaw’sNetwork” for more information on Shaw Go WiFi.

We are executing on our plan to ensure that our network keeps pace with the expectations for bandwidth, speed and reliabilitythat our customers expect today and will expect in the future. See “Shaw’s Network” for a description of our network and someof the advances that we are undertaking.

VideoOur network-connected video services continue to offer a wide selection of television channels (including over 120 highdefinition (“HD”) channels) and over 10,000 on-demand, pay-per-view and subscription movie and television programmingtitles.

Customers can now choose from a selection of primary channel packages and may add from a variety of sports, family and othertheme specialty packages and a number of individual channels that we offer on a channel-by-channel basis. In March 2016 wewill expand choice with a new small basic service and smaller theme packages and by December 2016 consumers will have thechoice to subscribe for the new small basic service and add, on a channel-by-channel basis, any of the channels that we offer.



Our network-connected customers access our television offerings through an interactive, on-screen program guide whichincludes access to on-demand movies and television programming and pay-per-view content, including scheduled sporting,concerts and other special events. With an enabled video terminal, customers can record and store programs for later viewingand pause and rewind live and recorded programs.

X1 for Network-Connected ConsumersWe recognize that, in order to ensure that we can deliver best in class customer experiences, we need to join with global scaleinitiatives and work with recognized industry leaders. In June 2015 we announced that we have partnered with Comcast tomake its market-leading cloud-based X1 video platform available to our customers. The X1 platform offers a seamless viewingexperience across multiple screens and devices both in and out of the home.

As a result of our collaboration with Comcast and Cisco, as integrator, we have aligned on the X1 technology roadmap and willbe the first in Canada to capitalize on this cloud technology.

We are in the late stages of our successful technical trial of this cloud-based platform and we are progressing on our plan to rollout this new technology through 2016.

In October 2015 we began deployment of the whole home video terminal used by Comcast in place of our current gateway andHD PVR terminals. This terminal operates on our current video platform and is future compatible for the rollout of the X1 in-home experience for network-connected customers.

PhoneShaw’s phone service offers a full-featured residential digital telephone service available in our network-connected homes as acomplement to our broadband Internet and video services.

SatelliteThrough Shaw Direct, our Consumer team connects families across Canada with video andaudio programming by satellite. Shaw Direct customers have access to over 550 digital videochannels (including over 220 HD channels) and over 10,000 on-demand, pay-per-view andsubscription movie and television programming titles.

Similar to our network-connected video service, satellite subscribers can now choose from a selection of primary channelpackages and may add from a variety of sports, family and other theme specialty packages and a number of individual channelsthat we offer on a channel-by-channel basis. In March 2016 we will expand choice with a new small basic service and smallertheme packages and by December 2016 consumers will have the choice to subscribe for the new small basic service and add,on a channel-by-channel basis, any of channels that we offer.

Shaw Direct is one of two satellite video services that are currently available across Canada. While Shaw Direct has manysubscribers in urban centres, market penetration for satellite video is stronger in areas having no or limited (generally fewer than80 channels) cable television coverage. The service is marketed through Shaw Direct and a nation-wide distribution network ofthird party retailers.

Shaw’s commitment to leading technology for Shaw Direct is evidenced on several fronts. With the 2013 launch of Anik G1,Shaw Direct added a third satellite to its platform. This third satellite increased Shaw Direct’s capacity by approximately 30%,enabling us to enhance our offerings, improve service quality and provide in-orbit back-up capacity. In addition, Shaw Directcontinues to transition to advanced modulation and encoding technology, including MPEG-4, for its programming which allowsus to increase channel capacity.



Shaw Direct Satellite TranspondersSatellite Transponders Nature of Interest

Anik G1 16 xKu-band Leased

Anik F2 16Ku-band Owned6 Ku-band Leased2 Ku-band (partial) Leased

Anik F1R 28 Ku-band Leased1 C-band Leased

Intelsat Galaxy 16 1 Ku-band (partial) Leased

Video – over-the-top at home and on the goIn addition to television viewing, we know that our customers want to experience our video programming online and on mobiledevices at home and on the go. That is why we have expanded our over-the-top offering so that our network-connected andsatellite customers can stream live television and a selection of on-demand programming directly to a mobile device through aselection of entertainment, children and sports focused applications, including those within our Media division.

SeasonalityWhile financial results for Consumer are generally not subject to significant seasonal fluctuations, subscriber activity mayfluctuate from one quarter to another. Subscriber activity may also be affected by competition and Shaw’s promotional activity.Further, satellite subscriber activity is modestly higher around the summer time when more subscribers have second homes inuse. Shaw’s network-connected and satellite Consumer business does not depend on any single customer or concentration ofcustomers.

Business Network Services

2015 2014



consolidated

Revenue 520 9%(1) 484 9%(1)

Operating income before restructuring costs and amortization(2) 256 11% 240 11%


Our Business Network Services division was formed in 2014 by bringing together all of our operations that serve business andpublic sector customers – whether connected by our network and/or our satellite services. This reorganization allowed us tobetter focus on the needs of our business customers and offer a more integrated and consistent customer experience.

Shaw BusinessShaw Business connects customers of all sizes to our network or by satellite with a range ofcommunications services – from home offices and regional businesses to large scaleenterprises. While we provide business grade network access to smaller clients on our localand regional hybrid fibre-coax network, our larger enterprise customers are generallyconnected by fibre to the premise. This is particularly true in Calgary where, with our 2013 acquisition of ENMAX EnvisionInc., we significantly increased our fibre footprint and profile in the competitive Calgary marketplace.

The range of services offered by Shaw Business includes:

Š Fibre Internet – scalable, symmetrical fibre Internet solutions from 10 Mbps to more than 10GbpsŠ Data Connectivity – secure private connectivity for multiple locations



Š Voice Solutions – from services that connect customer premise equipment to the phone network and single voice linesolutions to robust fully managed hosted unified communications functionality

Š Broadcast Video – high-quality video streaming across North America in real time

Business customers are looking for a communications partner that takes care of their communication infrastructure – a partnerthat will relieve them of the chore and complexity of managing communications so that they can focus on growing theirbusinesses. That is why we collaborated with global scale technology leaders to launch our “Smart” suite of easy to use andflexible managed business communications solutions:

Š SmartVoice is a unified communications solution that integrates instant messaging, presence, email, video conferencingand a mobile application – it is built on Broadsoft’s BroadWorks platform

Š SmartWiFi is a fully-managed internet solution designed to offer seamless secure wireless connectivity for employees andguests in the office and on the go with Shaw Go WiFi – it is deployed over Cisco’s Meraki platform

In order to continue to meet our customer needs in the future, we are executing our plan to ensure that our network keeps pacewith the expectations for bandwidth, speed and reliability that our customers expect today and will expect in the future. See“Shaw’s Network” for a description of our network and the advances that we are undertaking.

Shaw Business is also leading the rollout to customers in western Canada of hybrid IT services available from our recentlyopened Calgary1 data centre. These services complement the current Shaw Business offering and leverage ViaWest’s 16 yearsof experience as a hybrid IT solutions provider. See discussion under “Business Infrastructure Services.”

Wholesale Network ServicesUsing our national and regional fibre network, we provide services to internet service providers (“ISPs”), other communicationscompanies, broadcasters, governments and other businesses and organizations that require end-to-end Internet and dataconnectivity in Canada and the United States. We also engage in public and private peering arrangements with high speedconnections to major North American, European and Asian networks and other tier-one backbone carriers.

Broadcast ServicesShaw Broadcast Services uses our substantial fibre backbone network to manage one ofNorth America’s largest full-service commercial signal distribution networks, delivering moretelevision and radio signals by satellite to cable operators and other multi-channel systemoperators in Canada and the U.S. than any other single-source satellite supplier. Thisbusiness is referred to as a “satellite relay distribution undertaking” or “SRDU”. ShawBroadcast Services currently provides SRDU and advanced signal transport services to approximately 350 distributionundertakings and redistributes approximately 500 television signals and over 100 audio signals in both English and French tomulti-channel system operators.

TrackingShaw Tracking provides asset tracking and communication services primarily in Canada toapproximately 600 customers in the transportation industry that have an aggregate ofapproximately 45,000 vehicles. By satellite, cellular, WiFi and Bluetooth, Shaw Trackingprovides immediate real-time visibility to a customer’s fleet and freight. Specifically, Shaw Tracking’s services integrate with acarrier’s fleet management system and capture location, performance, productivity and other measures pertaining to acustomer’s assets.



Business Infrastructure Services

2015(1)


consolidated

Revenue 246 4%(2)

Operating income before restructuring costs and amortization(3) 95 4%

(1) Fiscal 2014 numbers are not applicable prior to acquisition in September 2014.(2) Before intersegment eliminations.(3) Refer to Key performance drivers.

Our Business Infrastructure Services business unit was formed with the acquisition of Denver,Colorado based ViaWest in September 2014 for US$1.2 billion. We acquired ViaWest as a growthplatform in the attractive North American data centre sector and to support the expansion of ourbusiness offerings in western Canada.

ViaWest is a leading hybrid IT solutions provider, including colocation, managed services, cloud computing, and security andcompliance services. It enables businesses to leverage both their existing IT infrastructure and emerging cloud resources todeliver the right balance of cost, scalability and security.

ViaWest has grown from five data centres in two markets in 2004 to 28 data centres (with over 680,000 square feet of usableraised floor space) in eight key western U.S. markets, including Denver, Dallas, Austin, Salt Lake City, Las Vegas, Minneapolis,Phoenix and our recently opened facility in Portland.

ViaWest has the capacity to support further U.S. growth with 75% utilization in its current facilities and substantial expansioncapacity at its Denver, Las Vegas, Minneapolis and Portland properties.

Business Infrastructure Services continues to execute on its plans for continued growth. In thefall of 2015 we expanded operations into Canada with the opening of the new Calgary datacentre under our Canadian brand “Shaw Data Centre & Cloud Solutions, Powered by ViaWest”,

where customers will benefit from ViaWest’s leading expertise and 16-year track record. ViaWest will also extend its reach intothe eastern U.S. with the acquisition of INetU and its facility in Pennsylvania that was announced in November 2015.

Business Infrastructure Services - Cities where Facilities are Located



We also offer expanded security offerings through our recent acquisition of AppliedTrust to offer leading security, compliance,development operations (“DevOps”) and infrastructure consulting services that address pressing security and compliance needsof our customers.

Over 1,600 businesses trust their infrastructure and mission critical data to our Business Infrastructure Services team becauseof the dedicated personnel who provide local, personalized, flexible and tailored solutions to meet the unique business needs ofour customers. With our team-based account management approach and 100% uptime commitment, we offer tailored solutionsdesigned for maximum reliability and flexibility.

Media2015 2014



consolidated

Revenue 1,080 19%(1) 1,096 20%(1)

Operating income before restructuring costs and amortization(2) 342 14% 353 16%


Our Media team provides Canadians with engaging programming content through one of Canada’s largest conventional televisionnetworks, Global Television, 19 specialty networks and digital properties.

Shaw acquired its Media operations from Canwest Global Communications Corp. through a series oftransactions that concluded in October 2010.

Media derives revenues from two principal sources: advertising revenue and revenue from consumers subscribing to ourspecialty channels. For both, it is critical that we offer Canadians entertaining content that engages them. Our content isavailable to Canadians through a variety of dynamic channels, whether conventional or specialty television, online websites orover-the-top platforms. Catering to consumer demand for quality and choice, we strive to offer the best content available toCanadians when and where they choose to consume it.

Conventional TelevisionGlobal Television, reaches virtually all English-speaking Canadians through 12 over-the-air conventional televisionstations. Global Television offers a programming mix of entertainment and news programs aimed primarily atviewers aged 18 to 49. Global Television’s line-up includes hit programs such as Bones, TheBlacklist, the NCIS franchise, Hawaii Five-O, SuperGirl, Limitless, Rookie Blue, Elementary, The Late Show with StephenColbert and three reality series, Survivor, Big Brother and Big Brother Canada.

NewsThe Global News team produces the news and current affairs content for Global Television. Global News hassuccessful local news programs in every major market, including the only major daily supper hour nationalnews show originating from Vancouver, and is the dominant local news organization in western Canada. GlobalNational, the network’s early-evening newscast garners almost a million viewers every weekday.

GlobalNews.ca is Global’s online platform that enables Canadians to access Global News coveragewherever and whenever they want, through the web, mobile devices, email alerts, RSS feeds and socialmedia. It features user friendly technology, which automatically scales content to fit any screen size or resolution to create aseamless experience on all browsers and platforms, including tablets and smart phones. New native content advertisingopportunities have been incorporated into the site giving advertisers exciting new ways to engage with the Global Newsaudience.



Specialty ChannelsShaw Media operates 19 of Canada’s most popularspecialty channels, including HGTV Canada, FoodNetwork Canada, Showcase, HISTORY, Slice andNational Geographic.

All of our specialty channels are wholly-owned by Shaw with the exception of channels for which we have partnered with globalleaders: Food Network Canada, HGTV Canada, DIY Canada (each of the foregoing with Scripps Networks), National GeographicCanada, National Geographic Canada Wild and BBCCanada. Our equity interests in these channels rangesbetween 50% and 71%, with voting control of 80% ormore.

Over-the-topTo meet the changing needs of our conventional and specialty viewing audiences, Media rolled out Global Go and HISTORY Goapps in 2014. These apps allow viewers to watch live TV, full episodes of select shows, clips and video exclusives on popularmobile devices, including WiFi enabled devices.

In November 2014, in partnership with Rogers Communications we launched shomi on a test basisto Shaw and Rogers customers. In August 2015, the service was made available to all Canadians.With a current library of approximately 1,200 films and 15,000 individual episodes in categories

curated by experts, shomi offers its subscribers some of the best entertainment available – whenever and wherever they want.shomi may be accessed over-the-top through the service’s website and the shomi app and on television through the on-demandlibraries of participating television providers.

AdvertisingOur Media team is exploring a number of next generation advertising solutions that combine the intelligence of data with thepower of television to maintain and grow our advertising business.

We are part of an industry working group that is looking at the development of a common video terminal based measurementsystem. We are also exploring new ways for advertisers to focus on optimal advertising placement on our programming byidentifying generic audience profiles and aggregate lifestyle demographics that can be used to identify relevant “audiences”.This allows advertisers to make decisions based on identified demographics to purchase “audiences” rather than shows andtime slots. All data collection, analysis and use is designed for compliance with applicable privacy protection laws.

The Media team is also continuing to create opportunities for branded content and product integrations within our shows andbrands. As one of the leading lifestyle content providers in Canada, we have a strong slate of context-relevant, originalproductions into which advertisers can integrate their products. This type of integration yields positive results for theadvertisers, generating a positive impact on brand perception, likelihood to purchase and consumer trust in the product.

Through these next generation advertising solutions Shaw is working to ensure that our advertising opportunities evolve with theexpectations of our advertising clients to position our Media team as the most innovative media partner for advertisers in ourspace.

We are also building revenues from our increasingly popular digital platforms along with further syndication opportunitiesaround our strong content.

Through these initiatives and advances in the way we create content, produce and deliver news and develop business, we havemoved Media beyond the traditional broadcast model to become a driven media company.

SeasonalityThe Media financial results are subject to fluctuations throughout the year due to, among other things, seasonal advertising andviewing patterns. In general, advertising revenues are higher during the fall, the first quarter, and lower during the summermonths, the fourth quarter, whereas expenses are incurred more evenly throughout the year. The specialty services depend on asmall number of broadcast distribution undertakings (“BDUs”) for distribution of their services.



Shaw’s Network

At Shaw we are proud of our advanced hybrid fibre-coax network that is comprised of:

Š North American fibre backboneŠ regional fibre optic and co-axial distribution networksŠ local Shaw Go Wifi connectivity

BackboneThe backbone of Shaw’s network includes multiple fibre capacity on two diverse cross-North America routes. The southern routeprincipally consists of approximately 6,400 route kilometres of fibre located on routes between Seattle and New York City (viaVancouver, Calgary, Winnipeg, Toronto Buffalo, and Chicago). The northern route consists of approximately 4,000 routekilometres of fibre between Edmonton and Toronto (via Saskatoon, Winnipeg and Thunder Bay). These routes, along with anumber of secured capacity routes, provide redundancy for the network. Shaw also uses a marine route consisting ofapproximately 330 route kilometres from Seattle to Vancouver (via Victoria), and has secured additional capacity on routesbetween a number of cities, including Vancouver and Calgary, Vancouver and San Jose, Toronto and New York City, Seattle andVancouver and Edmonton and Toronto.

LONDON

AMSTERDAM

ASIA

ASIA

SASKATOONVANCOUVERCALGARY

VICTORIA

SAN JOSEPALO ALTO

BUFFALO

MONTREALOTTAWA

WASHINGTONASHBURN

WINNIPEG

TORONTO

CHICAGO

ED

MO

NTO

N

SEATTLE

KA

MLO

OP

S

REGINA

NEW YORK

Regional Distribution NetworkWe connect our backbone network to residential and business customers through our extensive regional fibre optic and co-axialcable distribution networks.



In 2013 we substantially completed a major upgrade of our co-axial access network to remove analog tier television services.This upgrade liberated bandwidth to significantly increase the capacity of our hybrid fibre-coax network and enabled theexpansion of our broadband Internet and other offerings. Digital video terminals were deployed into customer homes thatallowed them to receive digital television services in place of former analog services. We referred to this reclamation initiative asthe Digital Network Upgrade (“DNU”).

In 2014 and 2015, we removed the remaining analog basic services in the Vancouver area, our largest market, in an initiativereferred to as “DNU II”. As a result, customers in this region only receive digital video services. A similar process to removeremaining analog basic services in our other major markets will begin in 2016.

Shaw continues to optimize the capacity and efficiency of our network and reduce congestion by deploying fibre optic cabledeeper into our access networks and closer to our customers. We are also increasing the number of optical serving areas or“nodes” in the network. This is a continual process that we apply year-over-year to increase fibre optic usage in our network andreduce the distance signals travel over coaxial cable to each consumer.

In addition to the initiatives above, our network roadmap in 2016 includes the roll out of the latest version of the Data overCable Service Interface Specification or “DOCSIS 3.1” which will provide significant added capacity in our hybrid fibre-coaxnetwork and lay the groundwork for further speed increases for our broadband customers. DOCSIS 3.1 represents the latestdevelopment in a set of technologies that increase the capability of a hybrid fibrecoax network to transmit data both to and fromcustomer premises.

With the various DNU initiatives, the deployment of fibre closer to our customers, by continuing to increase the number ofnodes in our hybrid fibre-coax network and by implementing DOCSIS 3.1 technologies we will continue to significantly improvethe performance and capacity of our network for years to come.

Shaw Go WiFiIn 2011 we began deploying WiFi access points to create Canada’s most extensive managed carrier-grade WiFi network, Shaw Go WiFi, as a wireless extension of our access network into thecommunity. Shaw Go WiFi extends a customer’s broadband experience beyond the home as avaluable extension of our customer network experience as an alternative to relying on mobileservice.

We continue to expand our Shaw Go WiFi build-out. To date, we have over 73,000 Shaw Go WiFiaccess points installed and operating throughout the network and over two million unique activedevices using Shaw Go WiFi. In addition, we have entered into agreements with 90 municipalitiesto extend Shaw Go WiFi service into public areas within those cities.

Community Investment

Shaw has a proud and lengthy track record of supporting causes and charities that focus on the health and strength of Canadiancommunities. For decades, we have been recognized as a philanthropic leader in our communities, providing support tohundreds of small and large organizations.

In fiscal 2015, Shaw contributed approximately $60 million in cash and in-kind support to charitable and communityorganizations working to make our neighbourhoods and cities better. We also took steps in 2015 to focus our governance,discipline and awareness of our community contributions, reflecting the increased value our stakeholders place on communityinvestment activities when making decisions about doing business with organizations.



Notably, we implemented a strategy in 2015 to focus the majority of our community investment activities on organizations thatsupport the needs of children, youth and millennials. Specifically, investments and causes that positively affect thisdemographic’s health and wellbeing, education and their access to technology and the Internet. This approach has resonatedwell with customers, employees, and government and community stakeholders, generating positivefeedback from local and federal government officials, a significant increase in applications forcharitable funding, and significantly higher media coverage of our initiatives. At the end of 2015,80% of Shaw’s community investments supported organizations focused on needs of children andyouth.

In 2015, Shaw also brought greater public and stakeholder awareness of our community investmentactivities under the umbrella of the Shaw Kids Investment Program, known as “SKIP”. SKIP is apublic platform used to describe our partnerships that benefit kids and youth-focused charities, andis an important vehicle by which we drive brand reputation.

Shaw’s partnerships with local and national charities are also used to complement local andregional marketing and sponsorship activities. Combining community investments withtraditional business activities speaks to our overall brand values of being a caring andcustomer centric organization. The most prominent example of this combination is Shaw’spartnership with local Calgary business leaders and the PGA TOUR in staging the ShawCharity Classic, a premier tournament on the Champions Tour that benefits 89 Albertacharities and has generated more than $8 million in charitable contributions in its three-yearhistory. The event has become a fixture on the Calgary tourism calendar, and has beenrecognized as one of the top tournaments on the Champions Tour. Importantly, the event alsostrengthens Shaw’s business and community relationships.

Additional Information Concerning the Business

Environmental MattersShaw’s operations are subject to environmental regulations, including those related to electronic waste, printed paper andpackaging. A number of provinces have enacted regulations providing for the diversion of certain types of electronic and otherwaste through product stewardship programs (“PSP”). Under a PSP, companies who supply designated products in or into aprovince are required to participate in or develop an approved program for the collection and recycling of designated materialsand, in some cases, pay a per-item fee. Such regulations have not had, and are not expected to have, a material effect on theCompany’s earnings or competitive position.

Foreign OperationsIn September 2014, the Company acquired ViaWest, a U.S.-based provider of hybrid IT solutions with 28 data centres in theU.S. ViaWest comprises substantially all of the assets and operations of the Business Infrastructure Services division.

Shaw Business U.S. Inc., a wholly-owned subsidiary of the Company, has entered into an indefeasible right of use (“IRU”) withrespect to a portion of a United States fibre network and owns certain other fibre and facilities in the United States. ShawBusiness U.S. Inc. commenced revenue-generating operations in the United States in 2002. Its revenues for the year endedAugust 31, 2015 were not material.

Government Regulations and Regulatory Developments

Substantially all of the Company’s Canadian business activities are subject to regulations and policies established under variouslegislation (Broadcasting Act (Canada) (“Broadcasting Act”), Telecommunications Act (Canada) (“Telecommunications Act”),Radiocommunication Act (Canada) (“Radiocommunication Act”) and Copyright Act (Canada) (“Copyright Act”)). Broadcastingand telecommunications are generally administered by the Canadian Radio-television and Telecommunications Commission(“CRTC”) under the supervision of the Department of Canadian Heritage (“Canadian Heritage”) and the Department of Industry(“Industry Canada”).



Pursuant to the Broadcasting Act, the CRTC is mandated to supervise and regulate all aspects of the broadcasting system in aflexible manner. The Broadcasting Act requires BDUs to give priority to the carriage of Canadian services and to provideefficient delivery of programming services. The Broadcasting Act also sets out requirements for television broadcasters withrespect to Canadian content. Shaw’s businesses are dependent upon licenses (or operate pursuant to an exemption order)granted and issued by the CRTC and Industry Canada.

Under the Telecommunications Act, the CRTC is responsible for ensuring that Canadians in all regions of Canada have access toreliable and affordable telecommunication services of high-quality. The CRTC has the authority to forbear from regulatingcertain services or classes of services provided by a carrier if the CRTC finds that there is sufficient competition for that serviceto protect the interests of users. All of Shaw’s telecommunication retail services have been forborne from regulation and are notsubject to price regulation. However, regulations do impact certain terms and conditions under which these services areprovided.

The technical operating aspects of the Company’s businesses are also regulated by technical requirements and performancestandards established by Industry Canada, primarily under the Telecommunications Act and the Radiocommunication Act.

Pursuant to the Copyright Act, the Copyright Board of Canada oversees the collective administration of copyright royalties inCanada, including the review and approval of copyright tariff royalties payable to copyright collectives by BDUs, televisionbroadcasters and online content services.

The sections below include a more detailed discussion of various regulatory matters and recent developments specific to Shaw’sbusinesses.

Licensing and ownershipFor each of its cable, direct to home satellite (“DTH”) and SRDU undertakings, the Company holds a separate broadcastinglicense or is exempt from licensing. In November 2010, the majority of cable undertakings owned and operated by theCompany were renewed by the CRTC for a five-year period ending August 31, 2015. On February 16, 2015, the CRTC issuedan administrative renewal of the licenses for Shaw’s undertakings serving British Columbia, Alberta, Saskatchewan, Manitobaand Ontario for a period of one year, to August 31, 2016. The licenses of the Company’s DTH and SRDU undertakings wererenewed in 2013 by the CRTC for a seven year period ending August 31, 2019. Shaw has never failed to obtain a licenserenewal for its cable, DTH or SRDU undertakings.

The Company also holds a separate license for each of its conventional over the air (“OTA”) television stations and eachspecialty service. These CRTC broadcasting licenses must be renewed from time to time and cannot be transferred withoutregulatory approval. The majority of the Company’s licenses for its OTA television stations and specialty services are current toAugust 31, 2016 and are expected to be administratively renewed to August 31, 2017. Under these licenses, the Company issubject to an expenditure-based regulatory regime, whereby the Company must expend a certain percentage of its prior yearrevenues from its conventional OTA and specialty services on Canadian content, and also on specific categories of Canadianprograms defined as “programs of national interest”. These obligations are imposed on an individual license basis, but withcertain restrictions, may be shared among various conventional OTA and specialty licenses.

The potential for new or increased fees through regulationIn July 2012, the CRTC determined to phase out completely, as of September 2014, the Local Programming ImprovementFund to support local television stations operating in non-metropolitan markets with contributions from licensed BDUs.

CRTC Regulations require licensed cable BDUs to obtain the consent of an OTA broadcaster to deliver its signal in a distantmarket. The Regulations provide that DTH undertakings may distribute a local over-the-air television signal without consentwithin the province of origin, but must obtain permission to deliver the over-the-air television signal beyond the province oforigin unless the DTH distribution undertaking is required to carry the signal on its basic service. Broadcasters may assert aright to limit distribution of distant signals or to seek remuneration for the distribution of their signals in distant markets on thebasis of these Regulations.

The Copyright Board is considering a proposed tariff for the retransmission of programming in distant television stations for theyears 2014 through 2018. The tariff proposed by the retransmission rights collectives would, if approved, represent asignificant increase in the per subscriber rates payable for the retransmission of programming in distant signals. The Companyhas objected to the tariff on behalf of its cable and DTH satellite divisions and is participating in the current hearing.



Let’s Talk TV regulatory frameworkIn October 2013, the CRTC initiated a “conversation with Canadians about the future of television”, commonly referred to as“Let’s Talk TV”, which led to a major review of the regulatory and policy framework for the Canadian television broadcastingsystem and a series of policy decisions in 2015. The new policy framework will require licensed BDUs to offer a $25 entry-levelservice offering (basic service) by March 2016. BDUs will be allowed to offer a larger “first-tier offering”. By March 2016, alldiscretionary services (not offered on the basic service) must be offered either on a standalone basis or in packages of up to tenprogramming services. On or after December 1, 2016, these services must be offered both on a standalone basis and inpackages of up to ten programming services. These changes will significantly impact BDUs’ customer management systems andmay create market uncertainty for both BDUs and programming services. Additional uncertainty may result from the eliminationof genre protection and changes to access rules. The CRTC has made new regulations, which will come into force onDecember 1, 2015, governing simultaneous substitution. These new regulations may result in rebates (BDU errors) or loss ofprivileges (broadcaster errors). The CRTC has also introduced new codes governing the relationship between BDUs and theircustomers, the “Television Service Provider Code of Conduct”, and the relationship between distributors and programmers, the“Wholesale Code”. The CRTC has, as well, prohibited 30-day cancellation policies for voice, Internet and broadcastingdistribution services. A proceeding on local and community television may result in changes to the policies and funding regimesgoverning community channels and local television stations.

Access rightsFor its network Shaw requires access to support structures, such as poles, strand and conduits of telecommunication carriersand electric utilities, in order to deploy cable facilities. Under the Telecommunications Act the CRTC has jurisdiction oversupport structures of telecommunication carriers, including rates for third party use. The CRTC’s jurisdiction does not extend toelectrical utility support structures, which are regulated by provincial utility authorities. For its network Shaw also requiresaccess to construct facilities in roadways and other public places. Under the Telecommunications Act, Shaw may do so with theconsent of the municipality.

New media and InternetThe CRTC has issued a digital media exemption order requiring that Internet-based and mobile point-to-point broadcastingservices not offer television programming on an exclusive or preferential basis in a manner that depends on subscription to aspecific mobile or retail Internet service and not confer an undue preference or disadvantage.

The CRTC has decided to not impose a levy on the revenue of exempt digital media undertakings to support Canadian newmedia content and instead issued an exemption order for VOD services offered both by licensed BDUs and direct to consumerover the Internet, such as shomi. These services benefit from virtually the same flexibility as services operating under the digitalmedia exemption order (including the ability to offer exclusive programming) and are subject to similar restrictions on offering aservice on an exclusive or preferential basis or conferring an undue preference or disadvantage.

Third Party Internet AccessShaw is mandated by the CRTC to allow independent ISPs to provide Internet services at premises served by Shaw’s network(“Third Party Internet Access” or “TPIA”). In 2014-2015, the CRTC completed a review of the wholesale wirelinetelecommunications policy framework, including TPIA, and extended mandated wholesale access services to include fibre-to-the-premise facilities, which will coincide with a shift to a new disaggregated wholesale Internet access service to be phased inover the next three years. The new disaggregated model will increase the number of interconnection points within the networksof wholesale providers, such as Shaw. Depending on how the model is implemented, Shaw may need to adjust its networkdesign and configuration.

Within the coming year, the CRTC also plans to review the competitor quality of service indicators and the rate rebate plan forcompetitors to ensure alignment with the new wholesale services framework. As part of this review, the CRTC may extendquality of service obligations to providers of wholesale Internet services.

CRTC basic services proceedingIn April 2015, the CRTC initiated a comprehensive review of basic telecommunications services to determine what services(e.g. telephone and broadband) are required by all Canadians to fully participate in the digital economy, whether there shouldbe changes to the subsidy regime and national contribution mechanism to fund expansion or adoption of broadband services in



Canada, and what the respective roles of the private sector, the CRTC and government should be in providingtelecommunications services. Currently, the national contribution fund overseen by the CRTC provides subsidies for local phoneservices in high cost serving areas and video relay service. Canadian telecommunications service providers, including Shaw, arerequired to contribute to the fund.

Other legislationCanada’s anti-spam legislation (together with the related regulations “CASL”) sets out a comprehensive regulatory regimeregarding online commerce, including requirements to obtain consent prior to sending commercial electronic messages andinstalling computer programs. CASL is administered primarily by the CRTC, and non-compliance may result in fines of up to$10 million. To ensure compliance with CASL, Shaw reviewed and updated its current practices with respect to marketing andother communications with customers and its practices regarding computer program installations.

On March 10, 2015, Bill C-13, An Act to amend the Criminal Code, the Canada Evidence Act, the Competition Act and theMutual Legal Assistance in Criminal Matters Act (“Bill C-13”) came into force. Bill C-13 expands the lawful access powers ofthe Government and introduces new requirements for telecommunications providers to preserve and produce subscriberinformation. Almost all of the newly proposed measures under Bill C-13 are subject to judicial oversight and do not require theprovision of information without a warrant or discharge of a burden of proof.

On June 18, 2015, Bill S-4, An Act to amend the Personal Information Protection and Electronic Documents Act and to make aconsequential amendment to another Act” (“Bill S-4”) received Royal Assent. Bill S-4 will introduce a mandatory record-keeping and notification system applicable with respect to breaches of privacy respecting the personal information held byShaw, and penalties for failure to comply with these new requirements. In addition, Bill S-4 modifies the standard for obtainingconsent for the collection, use and retention of personal information, creating a higher burden for organizations.

Digital transition and repurposing of spectrumIn July 2009, the CRTC identified the major markets where it expected conventional television broadcasters to convert theirfull-power OTA analog transmitters to digital transmitters by August 31, 2011. The conversion from analog to digital freed upspectrum for government auction to mobile providers. The Company completed the digital transition in all mandatory markets asof August 31, 2011. Since then, the Company has been converting transmitters in non-mandatory markets with a view tocompletion in 2016, a condition of the CRTC’s approval of the Canwest Global acquisition. On December 18, 2014, IndustryCanada launched a consultation to consider repurposing some of the 600 MHz spectrum band currently used by our Mediadivision and other broadcasters for OTA transmission. At the same time, Industry Canada introduced a moratorium onapplications to modify existing television broadcasting certificates and on any new licensing in the spectrum band pending theconsultations and related processes. Shaw has, accordingly, requested from the CRTC an extension of the time line to completethe full slate of analog to digital conversions.

On August 14, 2015, Industry Canada confirmed its intent to proceed with repurposing some of the 600 MHz spectrum bandfor commercial mobile use and to jointly establish a new allotment plan in collaboration with the United States.Accommodating this change will require our Media division to install new equipment or reconfigure existing equipment ataffected sites and may have an impact on signal quality and coverage. Industry Canada has not yet decided whetherbroadcasters will be reimbursed for their costs of facilitating this transition, stating that this decision is the first step in a multi-year repurposing process and that consideration of compensation to broadcasters was not a part of this phase.

Limits on non-Canadian ownership and control for broadcasting undertakingsNon-Canadians are permitted to own and control, directly or indirectly, up to 33.3% of the voting shares and 33.3% of thevotes of a holding company that has a subsidiary operating company licensed under the Broadcasting Act. In addition, up to20% of the voting shares and 20% of the votes of a licensee may be owned and controlled, directly or indirectly, by non-Canadians. As well, the chief executive officer (CEO) and not less than 80% of the board of directors of the licensee must beresident Canadians. There are no restrictions on the number of non-voting shares that may be held by non-Canadians at eitherthe holding company or licensee level. Neither the holding company nor the licensee may be controlled in fact by non-Canadians, the determination of which is a question of fact within the jurisdiction of the CRTC.



The same restrictions apply to certain Canadian carriers pursuant to the Telecommunications Act, the Radiocommunication Actand associated regulations, except that there is no requirement that the CEO be a resident Canadian. In June 2012, theTelecommunications Act was amended to remove Canadian ownership requirements for wireline and wirelesstelecommunications carriers with annual revenues from the provision of telecommunications services in Canada that representless than 10% of the total annual revenues. This may lead to greater levels of competition in the Canadian telecommunicationsmarket.

The Company’s Articles contain measures to ensure the Company continues to comply with applicable Canadian ownershiprequirements and its ability to obtain, amend or renew a license to carry on any business. Shaw must file a compliance reportannually with the CRTC confirming that it is eligible to operate in Canada as a telecommunications common carrier.

KEY PERFORMANCE DRIVERS

Shaw measures the success of its strategies using a number of key performance drivers which are outlined below, including adiscussion as to their relevance, definitions, calculation methods and underlying assumptions.

Financial Measures

RevenueRevenue is a measurement determined in accordance with International Financial Reporting Standards (“IFRS”). It representsthe inflow of cash, receivables or other consideration arising from the sale of products and services. Revenue is net of itemssuch as trade or volume discounts, agency commissions and certain excise and sales taxes. It is the base on which free cashflow, a key performance driver, is determined; therefore, it measures the potential to deliver free cash flow as well as indicatinggrowth in a competitive market place.

The Company’s continuous disclosure documents may provide discussion and analysis of non-IFRS financial measures. Thesefinancial measures do not have standard definitions prescribed by IFRS and therefore may not be comparable to similarmeasures disclosed by other companies. The Company’s continuous disclosure requirements may also provide discussion andanalysis of additional GAAP measures. Additional GAAP measures include line items, headings and sub-totals in financialstatements. The Company utilizes these measures in making operating decisions and assessing its performance. Certaininvestors, analysts and others utilize these measures in assessing the Company’s operational and financial performance and asan indicator of its ability to service debt and return cash to shareholders. These non-IFRS measures and additional GAAPmeasures have not been presented as an alternative to net income or any other measure of performance or liquidity prescribedby IFRS. The following contains a description of the Company’s use of non-IFRS financial measures and additional GAAPmeasures and provides a reconciliation to the nearest IFRS measure or provides a reference to such reconciliation.

Operating income before restructuring costs and amortizationOperating income before restructuring costs and amortization is calculated as revenue less operating, general and administrativeexpenses. It is intended to indicate the Company’s ability to service and/or incur debt, and therefore it is calculated before one-time items like restructuring costs, amortization (a non-cash expense) and interest. Operating income before restructuring costsand amortization is also one of the measures used by the investing community to value the business.



Relative increases period-over-period in operating income before restructuring costs and amortization and in operating marginare indicative of the Company’s success in delivering valued products and services, and engaging programming content to itscustomers in a cost-effective manner.

Year ended August 31,(millions of Canadian dollars) 2015 2014

Operating income 1,432 1,439Add back (deduct):

Restructuring costs 52 58Amortization:

Deferred equipment revenue (78) (69)Deferred equipment costs 164 142Property, plant and equipment, intangibles and other 809 692

Operating income before restructuring costs and amortization 2,379 2,262

Operating marginOperating margin is calculated by dividing operating income before restructuring costs and amortization by revenue.

Free cash flowFree cash flow is calculated as operating income before restructuring costs and amortization, less interest, cash taxes paid orpayable, capital expenditures (on an accrual basis and net of proceeds on capital dispositions and adjusted to exclude amountsfunded through the accelerated capital fund) and equipment costs (net), adjusted to exclude share-based compensationexpense, less cash amounts associated with funding the new and assumed CRTC benefit obligations related to the acquisitionof Shaw Media as well as excluding non-controlling interest amounts that are consolidated in the operating income beforerestructuring costs and amortization, capital expenditure and cash tax amounts. Free cash flow also includes changes inreceivable related balances with respect to customer equipment financing transactions as a cash item, and is adjusted forrecurring cash funding of pension amounts net of pension expense. Dividends paid on the Company’s Cumulative RedeemableRate Reset Preferred Shares are also deducted.

Free cash flow has not been reported on a segmented basis. Certain components of free cash flow including operating incomebefore restructuring costs and amortization, CRTC benefit obligation funding, and non-controlling interest amounts continue tobe reported on a segmented basis. Capital expenditures (on an accrual basis net of proceeds on capital dispositions) andequipment costs (net) are reported on a combined basis for Consumer and Business Network Services due to the commoninfrastructure while Business Infrastructure Services and Media are separately reported. Other items, including interest andcash taxes, are not generally directly attributable to a segment, and are reported on a consolidated basis.



The Company uses free cash flow as a measure of the Company’s ability to repay debt and return cash to shareholders.Consolidated free cash flow is calculated as follows:

Year ended August 31,(millions of Canadian dollars) 2015 2014(3)

RevenueConsumer 3,752 3,768Business Network Services 520 484Business Infrastructure Services 246 –Media 1,080 1,096

5,598 5,348Intersegment eliminations (110) (107)

5,488 5,241

Operating income before restructuring costs and amortization(1)

Consumer 1,686 1,669Business Network Services 256 240Business Infrastructure Services 95 –Media 342 353

2,379 2,262

Capital expenditures and equipment costs (net):(2)

Consumer and Business Network Services 954 1,077Business Infrastructure Services 152 –Media 16 18

1,122 1,095Accelerated Capital Fund Investment(1) (150) (240)

Total 972 855

Free cash flow before the following 1,407 1,407Less

Interest (281) (264)Cash taxes (375) (359)

Other adjustments:Non-cash share-based compensation 4 3CRTC benefit obligation funding (31) (58)Non-controlling interests (26) (31)Pension adjustment (45) (5)Customer equipment financing 13 18Preferred share dividends (13) (13)

Free cash flow 653 698

Operating margin(1)

Consumer 44.9% 44.3%Business Network Services 49.2% 49.6%Business Infrastructure Services 38.6% n/aMedia 31.7% 32.2%

(1) Refer to Key performance drivers.(2) Per Note 24 to the audited Consolidated Financial Statements.(3) Restated to reflect the change in segment reporting whereby residential and enterprise services that were

included in the Cable and Satellite segments are now realigned into new Consumer and Business NetworkServices segments.



Accelerated capital fundDuring 2013, the Company established a notional fund, the accelerated capital fund, of up to $500 million with proceedsreceived, and to be received, from several strategic transactions. The accelerated capital initiatives were funded through thisfund and not cash generated from operations. Key investments included the Calgary data centres, further digitization of thenetwork and additional bandwidth upgrades, development of IP delivery of video, expansion of the Shaw Go WiFi network, andadditional innovative product offerings related to Shaw Go and other applications to provide an enhanced customer experience.Approximately $110 million was invested in fiscal 2013, $240 million was invested in fiscal 2014 and $150 million investedin fiscal 2015.

Statistical MeasuresSubscriber counts (or Revenue Generating Units (“RGUs”)), including penetration and bundled customersThe Company measures the count of its customers in its Consumer and Business Network Services divisions. Cable videosubscribers include residential customers, multiple dwelling units (“MDUs”) and commercial customers. A residentialsubscriber who receives at a minimum, basic cable service, is counted as one subscriber. In the case of MDUs, such asapartment buildings, each tenant with a minimum of basic cable service is counted as one subscriber, regardless of whetherinvoiced individually or having services included in his or her rent. Each building site of a commercial customer (e.g., hospitals,hotels or retail franchises) that is receiving at a minimum, basic cable service, is counted as one subscriber. Satellite videosubscribers are counted in the same manner as cable video customers except that they also include seasonal customers whohave indicated their intention to reconnect within 180 days of disconnection. Internet customers include all modems on billingand Phone lines includes all phone lines on billing. All subscriber counts exclude complimentary accounts but includepromotional accounts.

RGUs represent the number of products sold to customers and includes Video (cable and satellite subscribers), Internetcustomers, and Phone lines. As at August 31, 2015 the Company had approximately 5.9 million RGUs.

Subscriber counts, or RGUs, and penetration statistics measure market share and also indicate the success of bundling andpricing strategies.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The Company prepared its Consolidated Financial Statements in accordance with IFRS as issued by the InternationalAccounting Standards Board (“IASB”). An understanding of the Company’s accounting policies is necessary for a completeanalysis of results, financial position, liquidity and trends. Refer to Note 2 to the Consolidated Financial Statements foradditional information on accounting policies. The following section discusses key estimates and assumptions that managementhas made under IFRS and how they affect the amounts reported in the Consolidated Financial Statements and notes. Followingis a discussion of the Company’s critical accounting policies:

Revenue and expense recognitionRevenue is considered earned as services are performed, provided that at the time of performance, ultimate collection isreasonably assured. Such performance is regarded as having been achieved when reasonable assurance exists regarding themeasurement of the consideration that will be derived from rendering the service. Revenue from cable, Internet, Digital Phoneand DTH customers includes subscriber service revenue when earned. The revenue is considered earned as the period of servicerelating to the customer billing elapses.

The Company has multiple deliverable arrangements comprised of upfront fees (subscriber connection fee revenue and/orcustomer premise equipment revenue) and related subscription revenue. The Company determined that the upfront feescharged to customers do not constitute separate units of accounting; therefore, these revenue streams are assessed as anintegrated package.



The Media division’s subscriber revenue is recognized monthly based on subscriber levels. Advertising revenues are recognizedin the period in which the advertisements are aired or displayed on the Company’s digital properties and recorded net of agencycommissions as these amounts are paid directly to the agency or advertiser. When a sales arrangement includes multipleadvertising spots, the proceeds are allocated to individual advertising spots under the arrangement based on relative fair values.

Subscriber connection fee revenueConnection fees have no standalone value to the customer separate and independent of the Company providing additionalsubscription services, therefore the connection fee revenue must be deferred and recognized systematically over the periodsthat the subscription services are earned. There is no specified term for which the customer will receive the related subscriptionservice, therefore the Company has considered its customer churn rate and other factors, such as competition from newentrants, to determine the deferral period of three years.

Subscriber connection and installation costsThe costs of physically connecting a new home are capitalized as part of the Company’s distribution system as the servicepotential of the distribution system is enhanced by the ability to generate future subscriber revenue. Costs of disconnections areexpensed as incurred as the activity does not generate future revenue.

Customer premise equipment revenue and costsCustomer premise equipment available for sale, which generally includes DCT and DTH equipment, has no standalone value tothe customer separate and independent of the Company providing additional subscription services. Therefore the equipmentrevenue is deferred and recognized systematically over the periods that the subscription services are earned. As the equipmentsales and the related subscription revenue are considered one transaction, recognition of the equipment revenue commencesonce the subscriber service is activated. There is no specified term for which the customer will receive the related subscriptionservice, therefore the Company has considered various factors including customer churn, competition from new entrants, andtechnology changes to determine the deferral period of three years.

In conjunction with equipment revenue, the Company also incurs incremental direct costs which include equipment and relatedinstallation costs. These direct costs cannot be separated from the undelivered subscription service included in the multipledeliverable arrangement. Under IAS 2 “Inventories”, these costs represent inventoriable costs and are deferred and amortizedover the period of three years, consistent with the recognition of the related equipment revenue. The equipment and installationcosts generally exceed the amounts received from customers on the sale of equipment (the equipment is sold to the customer ata subsidized price). The Company defers the entire cost of the equipment, including the subsidy portion, as it has determinedthat this excess cost will be recovered from future subscription revenues and that the investment by the customer in theequipment creates value through increased retention.

Shaw Tracking equipment revenue and costs

Shaw Tracking equipment revenue is recognized over the period of the related service contract for airtime, which is generallyfive years.

In conjunction with Shaw Tracking equipment revenue, the Company incurs incremental direct costs including equipmentcosts. These direct costs cannot be separated from the undelivered tracking service included in the multiple deliverablearrangement. Under IAS 2 “Inventories”, these costs represent inventoriable costs and are deferred and amortized over theperiod of five years, consistent with the recognition of the related tracking equipment revenue.

Shaw Business installation revenue and expenses

The Company also receives installation revenues in its Shaw Business operation on contracts with commercial customers whichare deferred and recognized as revenue on a straight-line basis over the related service contract, generally spanning two to tenyears. Direct and incremental costs associated with the service contract, in an amount not exceeding the upfront installationrevenue, are deferred and recognized as an operating expense on a straight-line basis over the same period.



Income statement classification

The Company distinguishes amortization of deferred equipment revenue and deferred equipment costs from the revenue andexpenses recognized from ongoing service activities on its income statement. Equipment revenue and costs are deferred andrecognized over the anticipated term of the related future revenue (i.e., the monthly service revenue) with the period ofrecognition spanning three to five years. As a result, the amortization of deferred equipment revenue and deferred equipmentcosts are non-cash items on the income statement, similar to the Company’s amortization of deferred IRU revenue, which theCompany also segregates from ongoing revenue. Further, within the lifecycle of a customer relationship, the customer generallypurchases customer premise equipment at the commencement of the customer relationship, whereas the subscription revenuerepresents a continuous revenue stream throughout that customer relationship. Therefore, the segregated presentation providesa clearer distinction within the income statement between cash and non-cash activities and between up-front and continuousrevenue streams, which assists financial statement readers to predict future cash flows from operations.

Allowance for doubtful accountsThe majority of the Company’s revenues are earned from selling on credit to individual subscribers. Because there are somecustomers who do not pay their debts, selling on credit necessarily involves credit losses. The Company is required to make anestimate of an appropriate allowance for doubtful accounts on its receivables. In determining its estimate, the Companyconsiders factors such as the number of days the account is past due, whether or not the customer continues to receive service,the Company’s past collection history and changes in business circumstances. The estimated allowance required is a matter ofjudgement and the actual loss eventually sustained may be more or less than the estimate, depending on events which have yetto occur and which cannot be foretold, such as future business, personal and economic conditions. Conditions causingdeterioration or improvement in the aging of accounts receivable and collections will increase or decrease bad debt expense.

Property, plant and equipment and other intangibles – capitalization of direct labour and overheadThe cost of property, plant and equipment and other intangibles includes direct construction or development costs (such asmaterials and labour) and overhead costs directly attributable to the construction or development activity. The Companycapitalizes direct labour and direct overhead incurred to construct new assets, upgrade existing assets and connect newsubscribers. These costs are capitalized as they are directly attributable to the acquisition, construction, development orbetterment of the networks or other intangibles. Repairs and maintenance expenditures are charged to operating expenses asincurred.

Direct labour and overhead costs are capitalized in three principal areas:

1. Corporate departments such as Technology and Network Operations (“TNO”): TNO is involved in overall planning anddevelopment of the cable/Internet/Digital Phone infrastructure. Labour and overhead costs directly related to theseactivities are capitalized as the activities directly relate to the planning and design of the construction of the distributionsystem. In addition, TNO devote considerable efforts towards the development of systems to support Digital Phone, WiFi,and projects related to new customer management, billing and operating support systems. Labour costs directly related tothese and other projects are capitalized.

2. Cable regional construction departments, which are principally involved in constructing, rebuilding and upgrading thecable/Internet/Digital Phone infrastructure: Labour and overhead costs directly related to the construction activity arecapitalized as the activities directly relate to the construction or upgrade of the distribution system. Capital projectsinclude, but are not limited to, projects such as the new subdivision builds, increasing network capacity for Internet,Digital Phone and VOD by reducing the number of homes fed from each node, and upgrades of plant capacity, includingthe DNU project, and the WiFi build.

3. Subscriber-related activities such as installation of new drops and Internet and Digital Phone services: The labour andoverhead directly related to the installation of new services are capitalized as the activity involves the installation ofcapital assets (i.e., wiring, software, etc.) which enhance the service potential of the distribution system through theability to earn future revenues. Costs associated with service calls, collections, disconnects and reconnects that do notinvolve the installation of a capital asset are expensed.



Amounts of direct labour and direct overhead capitalized fluctuate from year to year depending on the level of customer growthand plant upgrades for new services. In addition, the level of capitalization fluctuates depending on the proportion of internallabour versus external contractors used in construction projects.

The percentage of direct labour capitalized in many cases is determined by the nature of employment in a specific department.For example, a significant portion of labour and direct overhead of the cable regional construction departments is capitalized asa result of the nature of the activity performed by those departments. Capitalization is also based on piece rate work performedby unit-based employees which is tracked directly. In some cases, the amount of capitalization depends on the level ofmaintenance versus capital activity that a department performs. In these cases, an analysis of work activity is applied todetermine this percentage split.

Amortization policies and useful livesThe Company amortizes the cost of property, plant and equipment and other intangibles over the estimated useful service livesof the items. These estimates of useful lives involve considerable judgment. In determining these estimates, the Company takesinto account industry trends and company-specific factors, including changing technologies and expectations for the in-serviceperiod of these assets. On an annual basis, the Company reassesses its existing estimates of useful lives to ensure they matchthe anticipated life of the technology from a revenue-producing perspective. If technological change happens more quickly or ina different way than the Company has anticipated, the Company may have to shorten the estimated life of certain property,plant and equipment or other intangibles which could result in higher amortization expense in future periods or an impairmentcharge to write down the value of property, plant and equipment or other intangibles.

IntangiblesThe excess of the cost of acquiring cable and satellite and media businesses over the fair value of related net identifiabletangible and intangible assets acquired is allocated to goodwill. Net identifiable intangible assets acquired consist primarily ofamounts allocated to broadcast rights and licenses which represent identifiable assets with indefinite useful lives.

Broadcast rights and licenses in the cable and satellite businesses are comprised of broadcast authorities including licensesand exemptions from licensing that allow access to homes and subscribers in a specific area that are identified on a businesscombination with respect to the acquisition of shares or assets of a BDU.

Broadcast licenses in the media business are licenses to operate conventional and specialty services that are identified on abusiness combination with respect to the acquisition of shares or assets of a broadcasting undertaking.

The Company has concluded that the broadcast rights and licenses have indefinite useful lives since there are no legal,regulatory, contractual, economic or other factors that would prevent the Company’s license renewals or limit the period overwhich these assets will contribute to the Company’s cash flows. Goodwill and broadcast rights and licenses are not amortizedbut are assessed for impairment on an annual basis in accordance with IAS 36 “Impairment”.

Program rights represent licensed rights acquired to broadcast television programs on the Company’s conventional and specialtytelevision channels and program advances are in respect of payments for programming prior to the window license start date.For licensed rights, the Company records a liability for program rights and corresponding asset when the license period hascommenced and all of the following conditions have been met: (i) the cost of the program is known or reasonably determinable,(ii) the program material has been accepted by the Company in accordance with the license agreement and (iii) the material isavailable to the Company for telecast. Program rights are expensed on a systematic basis generally over the estimated exhibitionperiod as the programs are aired and are included in operating, general and administrative expenses.

Other intangibles include software that is not an integral part of the related hardware, customer relationships as well as atrademark and brands. Software is amortized on a straight-line basis over their estimated useful lives ranging from three to tenyears. Customer relationships represent the value of customer contracts and relationships acquired in a business combinationand are amortized on a straight-line basis over the estimated useful life of 15 years.

Asset impairmentThe Company tests goodwill and indefinite-life intangibles for impairment annually (as at March 1) and when events or changesin circumstances indicate that the carrying value may be impaired. The recoverable amount of each cash-generating unit



(“CGU”) is determined based on the higher of the CGU’s fair value less costs to sell and its value in use. A CGU is the smallestidentifiable group of assets that generate cash flows that are independent of the cash inflows from other assets or groups ofassets. The Company’s cash generating units are Cable, Satellite, Media and Data Centres. Where the recoverable amount of theCGU is less than its carrying amount, an impairment loss is recognized. Impairment losses relating to goodwill cannot bereversed in future periods. The results of the impairment tests are provided in Note 10 to the Consolidated FinancialStatements.

Employee benefit plansAs at August 31, 2015, Shaw had non-registered defined benefit pension plans for key senior executives and designatedexecutives and various registered defined benefit plans for certain unionized and non-unionized employees. The amountsreported in the financial statements relating to the defined benefit pension plans are determined using actuarial valuations thatare based on several assumptions including the discount rate and rate of compensation increase. While the Company believesthese assumptions are reasonable, differences in actual results or changes in assumptions could affect employee benefitobligations and the related income statement impact. The differences between actual and assumed results are immediatelyrecognized in other comprehensive income/loss. The most significant assumption used to calculate the net employee benefitplan expense is the discount rate. The discount rate is the interest rate used to determine the present value of the future cashflows that is expected will be needed to settle employee benefit obligations and is also used to calculate the interest income onplan assets. It is based on the yield of long-term, high-quality corporate fixed income investments closely matching the term ofthe estimated future cash flows and is reviewed and adjusted as changes are required. The following table illustrates theincrease on the accrued benefit obligation and pension expense of a 1% decrease in the discount rate:

(millions of Canadian dollars)

Accrued BenefitObligation at

End of Fiscal 2015Pension Expense

Fiscal 2015

Weighted Average Discount Rate – Non-registered Plans 4.10% 4.00%Weighted Average Discount Rate – Registered Plans 4.10% 4.09%Impact of: 1% decrease – Non-registered Plans $ 84 $ 4Impact of: 1% decrease – Registered Plans $ 31 $ 3

Deferred income taxesThe Company has recognized deferred income tax assets and liabilities for the future income tax consequences attributable todifferences between the financial statement carrying amounts of assets and liabilities and their respective tax bases. Deferredtax assets are also recognized in respect of losses of certain of the Company’s subsidiaries. The deferred income tax assets andliabilities are measured using enacted or substantially enacted tax rates expected to apply to taxable income in the years inwhich the temporary differences are expected to reverse or the tax losses are expected to be utilized. Realization of deferredincome tax assets is dependent upon generating sufficient taxable income during the period in which the temporary differencesare deductible. The Company has evaluated the likelihood of realization of deferred income tax assets based on forecasts oftaxable income of future years, existing tax laws and tax planning strategies. Significant changes in assumptions with respect tointernal forecasts or the inability to implement tax planning strategies could result in future impairment of these assets.

Commitments and contingenciesThe Company is subject to various claims and contingencies related to lawsuits, taxes and commitments under contractual andother commercial obligations. Contingent losses are recognized by a charge to income when it is likely that a future event willconfirm that an asset has been impaired or a liability incurred at the date of the financial statements and the amount can bereasonably estimated. Contractual and other commercial obligations primarily relate to network fees, equipment and servicepurchases, program rights and operating lease agreements for use of transmission facilities, including maintenance of satellitetransponders and lease of premises in the normal course of business. Significant changes in assumptions as to the likelihoodand estimates of the amount of a loss could result in recognition of additional liabilities.



RELATED PARTY TRANSACTIONS

Related party transactions are reviewed by Shaw’s Corporate Governance and Nominating Committee, comprised of independentdirectors. The following sets forth certain transactions in which the Company is involved.

CorusThe Company and Corus are subject to common voting control. During the year, network, advertising and programming feeswere paid to various Corus subsidiaries. The Company provided uplink of television signals, programming content, Internetservices and lease of circuits to various Corus subsidiaries. In addition, the Company provided Corus with television advertisingspots in return for radio and television advertising.

During 2014, the Company closed the sale of its 50% interest in two French-language channels, Historia and Series+, to Corus.

Burrard Landing Lot 2 Holdings PartnershipThe Company has a 33.33% interest in the Partnership. During the current year, the Company paid the Partnership for lease ofoffice space in Shaw Tower. Shaw Tower, located in Vancouver, BC, is the Company’s headquarters for its lower mainlandoperations.

Key management personnel and board of directorsKey management personnel consist of the most senior executive team and along with the Board of Directors have the authorityand responsibility for directing and controlling the activities of the Company. In addition to compensation provided to keymanagement personnel and the Board of Directors for services rendered, the Company transacts with companies related tocertain Board members primarily for the purchase of remote control units, network programming and installation of equipment.

NEW ACCOUNTING STANDARDS

Shaw has adopted or will adopt a number of new accounting policies as a result of recent changes in IFRS as issued by theIASB. The ensuing discussion provides additional information as to the date that Shaw is or was required to adopt the newstandards, the methods of adoption permitted by the standards, the method chosen by Shaw, and the effect on the financialstatements as a result of adopting the new policies. The adoption or future adoption of these accounting policies has not and isnot expected to result in changes to the Company’s current business practices.

Adoption of recent accounting pronouncementThe adoption of the following standard effective September 1, 2014 had no impact on the Company’s consolidated financialstatements.

Š IFRIC 21 Levies, provides guidance on when to recognize a financial liability imposed by a government, if the levy isaccounted for in accordance with IAS 37, Provisions, Contingent Liabilities and Contingent Assets, or where the timingand amount of the levy is certain.

Standards, interpretations and amendments to standards issued but not yet effectiveThe Company has not yet adopted certain standards, interpretations and amendments that have been issued but are not yeteffective. The following pronouncements are being assessed to determine their impact on the Company’s results and financialposition.

Š Clarification of Acceptable Methods of Depreciation and Amortization (Amendments to IAS 16 Property, Plant andEquipment and IAS 38 Intangible Assets) prohibits revenue from being used as a basis to depreciate property, plant andequipment and significantly limits use of revenue-based amortization for intangible assets. The amendments are to beapplied prospectively for the annual period commencing September 1, 2016.

Š IFRS 15 Revenue from Contracts with Customers, was issued in May 2014 and replaces IAS 11 Construction Contracts,IAS 18 Revenue, IFRIC 13 Customer Loyalty Programs, IFRIC 15 Agreements for the Construction of Real Estate, IFRIC18 Transfers of Assets from Customers and SIC-31 Revenue—Barter Transactions Involving Advertising Services. Thenew standard requires revenue to be recognized to depict the transfer of promised goods or services to customers in anamount that reflects the consideration expected to be received in exchange for those goods or services. The principles are



to be applied in the following five steps: (1) identify the contract(s) with a customer, (2) identify the performanceobligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performanceobligations in the contract, and (5) recognize revenue when (or as) the entity satisfies a performance obligation. The newstandard is to be applied either retrospectively or on a modified retrospective basis and is effective for the annual periodcommencing September 1, 2018.

Š IFRS 9 Financial Instruments: Classification and Measurement, replaces IAS 39 Financial Instruments and applies aprincipal-based approach to the classification and measurement of financial assets and financial liabilities, including anexpected credit loss model for calculating impairment, and includes new requirements for hedge accounting. Thestandard is required to be applied retrospectively for the annual period commencing September 1, 2018.

KNOWN EVENTS, TRENDS, RISKS AND UNCERTAINTIES

The discussion in this MD&A addresses only what management has determined to be the most significant known events, trends,risks and uncertainties relevant to the Company, its operations and/or its financial results. This discussion is not exhaustive.The discussion of these matters should be considered in conjunction with the “Caution Concerning Forward-LookingStatements”.

Competition and technological changeShaw operates in an open and competitive marketplace. Our businesses face competition from regulated and unregulatedentities using existing or new communications technologies and from illegal services. In addition, the rapid deployment of newtechnologies, services and products has reduced the traditional lines between telecommunications, Internet and broadcastingservices and further expands the competitive landscape. Shaw may face competition in the future from other technologies beingdeveloped or yet to be developed. While Shaw continually seeks to strengthen its competitive position through investments ininfrastructure, technology, programming and customer service, and through acquisitions, there can be no assurance that theseinvestments will be sufficient to maintain Shaw’s market share or performance in the future.

The following competitive events, trends, risks and/or uncertainties specific to areas of our business may have a materialadverse effect on Shaw, its operations and/or its financial results. In each case, the competitive events, trends, risks and/oruncertainties may increase or continue to increase.

Consumer videoShaw’s Consumer video services, delivered through both our network-connected and satellite platforms, compete with otherdistributors of video and audio signals, including telephone companies offering video services, other satellite-based videoservices, other competitive cable television undertakings and OTA local and regional broadcast television signals. We alsocompete increasingly with unregulated over-the-top video services and offerings available over Internet connections. Continuedimprovements in the quality of streaming video over the Internet and the increasing availability of television shows and moviesonline has increased and will continue to increase competition to Shaw’s Consumer video services. Our satellite services alsocompete with illegal satellite services including grey and black market offerings.

We expect that competition, including aggressive discounting practices by competitors to gain market share, will continue toincrease.

Consumer InternetHigh-speed Internet access services are principally provided through cable modem and digital subscriber line technology, andincreasingly through fibre to the home. Shaw competes with a number of different types of ISPs offering residential Internetaccess including independent service providers, traditional telephone companies, wireless providers and resellers making use ofTPIA to provide Internet access in various markets.

Shaw expects that consumer demand for higher Internet access speeds and greater bandwidth will continue to be driven bybandwidth-intensive applications including streaming video, digital downloading and interactive gaming. As described furtherunder “Shaw’s Network”, Shaw continues to expand the capacity and efficiency of its network to handle the anticipatedincreases in consumer demand for higher Internet access speeds and greater bandwidth, however there can be no assurancethat our investments in network capacity will continue to meet this increasing demand.



Consumer phoneShaw’s competitors for Consumer phone services include traditional telephone companies, competitive local exchange carriers,non-facilities-based Voice over Internet Protocol (“VoIP”) providers and wireless providers. Several of such competitors havelarger operational and financial resources than Shaw and are well established with residential customers in their respectivemarkets. In addition, there is a continuing trend toward households opting to rely on wireless voice services in place of landlineservices such as ours. These developments may negatively affect the business and prospects of our Consumer phone services.

Business Network ServicesShaw Business competes with other telecommunications carriers in providing high-speed data and video transport and Internetconnectivity services to businesses, ISPs and other telecommunications providers. The telecommunications services industry inCanada is highly competitive, rapidly evolving and subject to constant change. Competitors of Shaw Business include traditionaltelephone companies, competitive access providers, competitive local exchange carriers, ISPs, private networks built by largeend users and other telecommunications companies. In addition, the development and implementation of new technologies byothers could give rise to significant additional competition.

Shaw Broadcast Services faces competition principally from one other operating SRDU in Canada. In February 2010, anadditional company was licensed by the CRTC to provide both satellite video and SRDU services in Canada, but has not yetcommenced service. Shaw Broadcast Services also faces competition from the expansion of fibre distribution systems deliveringdistant U.S. and Canadian conventional television signals into territories previously served only by SRDU operators.

Business Infrastructure ServicesShaw’s hybrid IT services business operates in a highly competitive market that includes telecommunications companies,carriers, ISPs, managed services providers, large real estate investment trusts and other data centre operators, many of whichare well-established in the areas where they operate. Ongoing consolidation within the industry has created, and is expected tocontinue to create, large organizations having larger operational and financial resources than Shaw.

MediaThe conventional and specialty television business and the advertising markets in which they operate are highly competitive.Numerous broadcast and specialty television networks, as well as online advertising platforms and websites, compete forsubscribers and advertising revenues. Shaw’s ability to compete successfully depends on a number of factors, including itsability to secure popular television and other programming rights for all platforms, including traditional linear broadcast rightsand non-linear rights, in order to achieve high distribution levels and attract advertising. Shaw’s ability to continue to attractadvertising customers also depends on its ability to meet the evolving expectations of its advertising customers.

Impact of regulationAs more fully discussed under “Government Regulations and Regulatory Developments”, a majority of our Canadian businessactivities are subject to regulations and policies administered by Industry Canada and/or the CRTC. Shaw’s operations andfinancial results are affected by changes in regulations, policies and decisions, including changes in interpretation of existingregulations by courts, the government or the regulators, in particular the CRTC, Industry Canada, the Competition Bureau andthe Copyright Board. This regulation relates to, and may have an impact on, among other things, licensing, competition,programming carriage and terms of carriage, strategic transactions and the potential for new or increased fees. Changes in theregulatory regime may have a material adverse effect on Shaw, its operations and/or its financial results.

Economic conditionsThe Canadian and U.S. economies are affected by uncertainty in global financial and equity markets and slowdowns in globaleconomic growth. Changes in economic conditions may affect discretionary consumer and business spending, resulting inincreased or decreased demand for Shaw’s product offerings. Current or future events caused by volatility in domestic orinternational economic conditions or a decline in economic growth may have a material adverse effect on Shaw, its operationsand/or its financial results.



Interest rates, foreign exchange rates and capital marketsShaw has the following financial risks in its day-to-day operations:

(a) Interest rates: Due to the capital-intensive nature of Shaw’s operations, the Company uses long-term financingextensively in its capital structure. The primary components of this structure include:

1. banking facilities as more fully described in Note 13 to the Consolidated Financial Statements, and

2. various Canadian denominated senior notes and debentures with varying maturities issued in the public marketsas more fully described in Note 13 to the Consolidated Financial Statements.

Interest on bank indebtedness is based on floating rates while the senior notes are primarily fixed-rate obligations. Ifrequired, Shaw uses its credit facility to finance day-to-day operations and, depending on market conditions,periodically converts the bank loans to fixed-rate instruments through public market debt issues. Increases in interestrates may have a material adverse effect on Shaw, its operations and/or its financial results.

As at August 31, 2015, 78% of Shaw’s consolidated long-term debt was fixed with respect to interest rates.

(b) Foreign exchange: A portion of Shaw’s debt, capital expenditures, revenues and operating expenses are denominatedin U.S. dollars – both for ViaWest and other operations of Shaw. In addition, Shaw’s net investment in ViaWest isexposed to foreign exchange risk related to fluctuations in exchange rates between the Canadian and U.S. dollar. Thisrisk is mitigated by certain U.S. dollar denominated debt which is designated as a hedge of the net investment.Fluctuations in the value of the Canadian dollar relative to the U.S. dollar may have a material adverse effect on Shaw,its operations and/or its financial results.

(c) Capital markets: Shaw requires ongoing access to capital markets to support our operations. Changes in capital marketconditions, including significant changes in market interest rates or lending practices, or changes in Shaw’s creditratings, may adversely affect our ability to raise or refinance short-term or long-term debt and therefore may have amaterial adverse effect on Shaw, its operations and/or its financial results.

Shaw manages its exposure to floating interest rates by maintaining a balance of fixed and floating rate debt. Shaw may enterinto forward contracts in respect of U.S. dollar capital expenditure commitments to manage its exposure to foreign exchangeuncertainty. In order to minimize the risk of counterparty default under its swap agreements, Shaw assesses thecreditworthiness of its swap counterparties. Further information concerning the policy and use of derivative financialinstruments is contained in Notes 2 and 28 to the Consolidated Financial Statements.

LitigationShaw and its subsidiaries are involved in litigation matters arising in the ordinary course and conduct of its business. Althoughmanagement does not expect that the outcome of these matters will have a material adverse effect on the Company, there canbe no assurance that these matters, or other legal matters that arise in the future, will not have a material adverse effect onShaw, its operations and/or its financial results.

Satellite failureShaw relies on three satellites (Anik F2, Anik F1R and Anik G1) owned by Telesat Canada (“Telesat”) to provide satelliteservices in our Consumer and Business Network Services divisions. The Company owns certain transponders on Anik F2 and haslong-term capacity service agreements in place in respect of transponders on Anik F1R, Anik F2 and Anik G1. The Company’sinterests in these transponders are only insurable indirectly through the satellite owner. For transponders on Anik F1R and AnikF2, the Company does not maintain any indirect insurance coverage as it believes the costs are uneconomic relative to thebenefit which could otherwise be derived through an arrangement with Telesat. In the case of Anik G1, Telesat is committed tomaintaining insurance on the satellite for five years from its April 2013 launch. As collateral for the transponder capacity pre-payments that were made by the Company to facilitate the construction of the satellite, the Company maintains a securityinterest in the transponder capacity and any related insurance proceeds that Telesat recovers in connection with an insured lossevent.

The Company does not maintain business interruption insurance covering damage or loss to one or more of the satellites as itbelieves the premium costs are uneconomic relative to the risk of satellite failure. Transponder capacity is available to the



Company on an unprotected, non-preemptible basis, in both the case of the Anik F2 transponders that are owned by Shaw andthe Anik F1R, Anik F2 and Anik G1 transponders that are secured through capacity service agreements. The Company haspriority access to spare transponders on Anik F1R, Anik F2 and Anik G1 in the case of interruption, subject to availability. Inthe event of satellite failure, service will only be restored as capacity becomes available. Restoration of satellite service onanother satellite may require repositioning or re-pointing of customers’ receiving dishes, an upgrade of their video terminal orcustomers may require a larger dish. The Anik G1 satellite has a switch feature that allows whole channel services (transpondersand available spares) to be switched from extended Ku-band to Ku-band, which provides the Company with limited back-up torestore failed whole channel services of Anik F1R. Satellite failure could negatively affect levels of customer service andcustomer relationships and may have a material adverse effect on Shaw, its operations and/or its financial results.

Network failureShaw’s business may be interrupted by network failures, including those caused by fire damage, natural disaster, power loss,hacking, computer viruses, disabling devices, acts of war or terrorism and other events. Shaw protects its network through anumber of measures including physical and information technology security, ongoing maintenance and placement of insuranceon our network equipment and data centres. The Company self-insures the plant in the hybrid fibre-coax network as it believesthe premium costs are uneconomic relative to the risk of failure. The risk of loss is mitigated as most of the hybrid fibre-coaxnetwork is located underground. In addition, it is likely that network damage caused by any one incident would be limited bygeographic area and therefore resulting business interruption and financial damages would be limited. Further, the Companyhas back-up disaster recovery plans in the event of network failure and redundant capacity for certain portions of the network.In the past, the Company has successfully recovered from network damage caused by natural disasters without significant costor disruption of service. Although Shaw has taken and continues to take steps to reduce the risk of network failure, networkfailures may occur, and such failures could negatively affect levels of customer service and customer relationships and mayhave a material adverse effect on Shaw, its operations and/or its financial results.

Information systems and internal business processesMany aspects of the Company’s business depend to a large extent on various IT systems and software, and on internal businessprocesses. Shaw regularly undertakes initiatives to update and improve these systems and processes. Although the Companyhas taken steps to reduce the risks of failure of these systems and processes, there can be no assurance that potential failuresof, or deficiencies in, these systems, processes or change initiatives will not have an adverse effect on Shaw, its operationsand/or its financial results.

Reliance on suppliersShaw is connected to or relies on other telecommunication carriers and certain utilities to conduct our business. Any disruptionto the services provided by these suppliers, including labour strikes and other work disruptions, bankruptcies, technicaldifficulties or other events affecting the business operations of these carriers or utilities may affect Shaw’s ability to operateand, therefore have a material adverse effect on Shaw, its operations and/or its financial results.

The Company sources its customer premise and capital equipment, capital builds as well as portions of its service offeringsfrom certain key suppliers. While the Company has alternate sources for many of these purchases, the loss of a key suppliermay adversely affect the Company’s ability to operate, and therefore have a material adverse effect on Shaw, its operationsand/or its financial results.

Programming expensesExpenses for Consumer and Business Network Services video programming continue to be one of our most significant singleexpense items. Costs continue to increase, particularly for sports programming. In addition, as we add programming ordistribute existing programming to more of our subscriber base, programming expenses increase. Although we have beensuccessful at reducing the impact of these cost increases through sale of additional services or increasing subscriber rates,there can be no assurance that we will continue to be able to do so and may have a material adverse effect on Shaw, itsoperations and/or its financial results.

Programming costs are also one of the most significant expenses in our Media division. Increased competition in the televisionbroadcasting industry and with online video providers for content, developments affecting producers and distributors of



programming content, changes in viewer preferences and other developments could impact both the availability and cost ofprogramming content. Although we have processes to effectively manage these costs, programming content may be purchasedfor broadcasting one to two years in advance, making it more difficult to predict how such content will perform, and if contentfails to perform as expected there may be a material adverse effect on Shaw, its operations and/or its financial results.

Unionized labourApproximately 50% of our Media division employees are employed under one of five collective agreements represented by threeunions. If labour disruptions occur, it is possible large numbers of employees may be involved and that our Media business maybe disrupted. Shaw is currently preparing to negotiate one collective agreement and the remaining four agreements have beenrenewed and are in effect for the next one to three years.

Acquisitions and other strategic transactionsShaw may from time to time make acquisitions to expand its existing businesses or to enter into sectors in which Shaw does notcurrently operate, dispositions to focus on core offerings or enter into other strategic transactions. Such acquisitions,dispositions and/or strategic transactions may fail to realize the anticipated benefits, result in unexpected costs and/or Shawmay have difficulty incorporating or integrating the acquired business, any of which may have a material adverse effect onShaw, its operations and/or its financial results.

Holding company structureSubstantially all of Shaw’s business activities are operated by our subsidiaries. As a holding company, our ability to meet ourfinancial obligations is dependent primarily upon the receipt of interest and principal payments on intercompany advances,management fees, cash dividends and other payments from our subsidiaries together with proceeds raised by the Companythrough the issuance of equity and the incurrence of debt, and from proceeds received on the sale of assets. The payment ofdividends and the making of loans, advances and other payments to Shaw by its subsidiaries may be subject to statutory orcontractual restrictions, are contingent upon the earnings of those subsidiaries and are subject to various business and otherconsiderations.

Control of the CompanyClass A Shares are the only shares entitled to vote on all shareholder matters. Voting control of the Company is held by theShaw Family Living Trust (“SFLT”) which holds, for the benefit of descendants of JR and Carol Shaw, 17,562,400 Class AShares, being approximately 78% of the issued and outstanding shares of such class. The sole trustee of SFLT is a privatecompany owned by JR Shaw and having a board comprised of seven directors, including JR Shaw as chair and five othermembers of his family. Accordingly, JR Shaw, through SFLT and its trustee, is able to elect a majority of the Board of Directorsof the Company and to control any vote by the holders of Class A Shares.

Dividend paymentsShaw currently pays monthly common share dividends in amounts approved on a quarterly basis by the Board of Directors. Atthe current approved dividend amount, the Company would pay approximately $565 million in common share dividends duringfiscal 2016 (before taking into account the Company’s dividend reinvestment plan (“DRIP”), as further described in “FinancialPosition”). While the Company expects to generate sufficient free cash flow in fiscal 2016 to fund these dividend payments,actual results may differ from expectations and there can be no assurance that the Company will continue common sharedividend payments at the current level.



SUMMARY OF QUARTERLY RESULTS

Quarter Revenue

Operatingincomebefore

restructuringcosts and

amortization(1)

Net incomeattributable

to equityshareholders

Netincome(2)

Basicearnings

pershare

Dilutedearnings

pershare

(millions of Canadian dollars except per share amounts)2015Fourth 1,343 573 272 276 0.57 0.57Third 1,419 643 202 209 0.42 0.42Second 1,337 557 163 168 0.34 0.34First 1,389 606 219 227 0.46 0.46

Total 5,488 2,379 856 880 1.80 1.79

2014Fourth 1,263 525 187 192 0.40 0.40Third 1,342 601 219 228 0.47 0.47Second 1,274 528 215 222 0.46 0.46First 1,362 608 236 245 0.51 0.51

Total 5,241 2,262 857 887 1.84 1.84

(1) Refer to Key performance drivers.(2) Net income attributable to both equity shareholders and non-controlling interests.

Quarterly revenue and operating income before restructuring costs and amortization are primarily affected by the seasonality ofthe Media division and fluctuate throughout the year due to a number of factors including seasonal advertising and viewingpatterns. Typically, the Media division has higher revenue in the first quarter driven by the fall launch of season premieres andhigh demand and the third quarter is affected by season finales and mid-season launches. Advertising revenue typicallydeclines in the summer months of the fourth quarter when viewership is generally lower. Effective the first quarter of thecurrent year the results reflect the addition of the new Business Infrastructure Services division upon acquisition of ViaWest onSeptember 2, 2014.

In the fourth quarter of 2015, net income increased by $67 million over the third quarter 2015 due to improved net otherrevenue items of $190 million and lower restructuring costs of $10 million, partially offset by lower operating income beforerestructuring costs and amortization of $70 million and higher income tax expense of $57 million. The improvement in netother revenue items was due to the combined effects of the gain on the sale of the wireless spectrum licenses of $158 millionand a write-down of $27 million in respect of a private portfolio investment in the fourth quarter and the $59 million net chargearising in the third quarter related to an impairment of goodwill, write-down of IPTV assets and proceeds received on theinsurance claim.

In the third quarter of 2015, net income increased $41 million over the second quarter 2015 due to higher operating incomebefore restructuring costs and amortization of $86 million, lower restructuring costs of $26 million and $11 million of proceedsrelated to the Shaw Court insurance claim, partially offset by a charge for impairment of goodwill of $15 million and write-downof IPTV assets of $55 million as well as the distributions received from a venture capital fund in the second quarter. Theimpairment of goodwill was in respect of the Tracking operations in the Business Network Services division and was a result ofthe Company’s annual impairment test of goodwill and indefinite-life intangibles in the third quarter. The write-down of IPTVassets was a result of the Company’s decision to work with Comcast to begin technical trials of their cloud-based X1 platform.

In the second quarter of 2015 net income decreased $59 million over the first quarter 2015 due to lower operating incomebefore restructuring costs and amortization of $49 million and restructuring expenses of $38 million partially offset by net otherrevenue items of $29 million due to aforementioned venture capital fund distributions.



In the first quarter of 2015, net income increased $35 million over the fourth quarter 2014 due to higher operating incomebefore restructuring costs and amortization of $81 million, partially offset by increases in amortization of $35 million and netother costs of $17 million. The increase in net other costs was primarily due to an equity loss of $13 million in respect of theCompany’s 50% interest in shomi, a new subscription video-on-demand service launched in the first quarter.

In the fourth quarter of 2014, net income decreased $36 million primarily due to lower operating income before restructuringcosts and amortization of $76 million, partially offset by the effect of the restructuring announced during the previous quarter.

In the third quarter of 2014, net income increased $6 million due to higher operating income before restructuring costs andamortization of $73 million and lower interest and amortization expense totaling $25 million, partially offset by restructuringexpenses of $53 million and reduction in net other revenue items of $41 million. The reduction in net other revenue items wasprimarily due to the gain on sale of media assets of $49 million net of the $8 million of debt retirement costs recorded in thesecond quarter.

In the second quarter of 2014, net income decreased $23 million due to lower operating income before restructuring costs andamortization of $80 million and increased amortization of $8 million, partially offset by an improvement in net other non-operating items of $36 million due to the aforementioned gain on sale of media assets net of debt retirement costs, and lowerincome tax expense of $24 million. As a result of the aforementioned changes in net income, basic and diluted earnings pershare have trended accordingly.

The following growth (losses) in subscriber statistics are provided to assist in understanding the trend of quarterly revenue andoperating income before restructuring costs and amortization for Consumer:

2015 2014

Subscriber Statistics First Second Third Fourth First Second Third Fourth

Video – Cable (15,591) (35,967) (24,524) (39,315) (29,619) (20,758) (12,075) (20,166)Video – Satellite (17,980) (8,254) (2,820) (8,146) (9,323) (1,405) (5,608) (6,606)Internet 14,048 (1,819) 7,212 2,699 2,746 12,767 12,399 11,983Digital phone lines (599) (12,027) (20,974) (29,683) 1,351 8,075 4,834 1,114



RESULTS OF OPERATIONS

Overview of fiscal 2015 consolidated results

Change

(millions of Canadian dollars except per share amounts) 2015 2014 20132015

%2014

%

Operations:Revenue 5,488 5,241 5,142 4.7 1.9Operating income before restructuring costs and amortization(1) 2,379 2,262 2,220 5.2 1.9Operating margin(1) 43.3% 43.2% 43.2% 0.1 –Funds flow from operations(2) 1,637 1,524 1,380 7.4 10.4Net income 880 887 784 (0.8) 13.1Free cash flow(1) 653 698 604 (6.4) 15.6

Balance sheet:Total assets 14,564 13,250 12,732Long-term financial liabilities

Long-term debt (including current portion) 5,669 4,690 4,818Other financial liabilities 20 5 53

Per share data:Earnings per share

Basic 1.80 1.84 1.64Diluted 1.79 1.84 1.63

Weighted average number of participating shares outstanding during period(millions) 468 457 448

Cash dividends declared per shareClass A 1.1613 1.0775 1.0050Class B 1.1638 1.0800 1.0075

(1) Refer to Key performance drivers.(2) Funds flow from operations is presented before changes in non-cash working capital as presented in the Consolidated

Statements of Cash Flows.

HighlightsŠ Net income was $880 million for fiscal 2015 compared to $887 million in 2014.Š Earnings per share were $1.80 in fiscal 2015 compared to $1.84 in 2014.Š Revenue for fiscal 2015 improved 4.7% to $5.49 billion from $5.24 billion last year.Š Operating income before restructuring costs and amortization of $2.38 billion in fiscal 2015 was up 5.2% over

last year’s amount of $2.26 billion.Š Consolidated free cash flow in fiscal 2015 was $653 million compared to $698 million in 2014.Š During 2015 the Company increased the dividend rate on the Class A Participating Shares and Class B Non-Voting

Participating Shares to an equivalent annual per share dividend rate of $1.1825 and $1.185 respectively.Dividends paid in 2015 were $535 million gross of amounts attributed to the dividend reinvestment plan.

Š On January 31, 2014 the Company issued $500 million senior unsecured notes at a rate of 4.35% dueJanuary 31, 2024 and $300 million floating rate senior unsecured notes due February 1, 2016. The floating ratesenior notes bear interest at an annual rate equal to three month CDOR plus 0.69%. The net proceeds from theissuances were used to redeem the $600 million senior unsecured notes due June 2, 2014 and for working capitaland general corporate purposes.

Š In April 2014 the Company announced changes to the structure of its operating divisions to improve overallefficiency while enhancing its ability to grow as the leading network and content experience company.



Commencing in fiscal 2015, Shaw’s residential and enterprise services are reorganized into new Consumer andBusiness units, respectively, with no changes to the Media division.Š The Company recorded restructuring costs of $58 million in fiscal 2014 associated with the approximately

400 management and non-customer facing roles which were eliminated by organizational changes in thatyear.

Š In 2015, the Company recorded $52 million in respect of continued restructuring, primarily related to severanceand employee related costs, which impacted approximately 1,700 employees.Š The Company announced a realignment of its customer care operations into centres of expertise in order to

improve the end-to-end customer service experience. The realignment affected approximately 1,600employees.

Š The Company also continued its organizational structure realignment efforts, including further restructuringof certain functions within Business Network Services.

Š The Media division undertook organizational changes as it redefines itself from a traditional broadcaster tothe broader focus of a media organization. Approximately 100 roles were eliminated and 45 new rolescreated.

Š As a result of these restructurings, the Company expects to realize aggregate annual cost savings, net of newhires to support the restructured operations, of approximately $75 million. These efficiencies will phase inthrough fiscal 2016 and be fully realized in fiscal 2017.

Š During fiscal 2015 and 2014, the Company entered into a number of transactions as follows:Š In late fiscal 2014, the Company announced it had entered into agreements to acquire 100% of the shares

of ViaWest for an enterprise value of US$1.2 billion. ViaWest is headquartered in Denver, Colorado and has27 data centres in 8 key Western U.S. markets providing collocation, cloud and managed services. OnSeptember 2, 2014, the Company closed the acquisition which was funded through a combination of cashon hand, assumption of ViaWest debt and a drawdown of US$330 million on the Company’s credit facility.The ViaWest acquisition provides the Company with a growth platform in the North American data centresector and is another step in expanding technology offerings for mid-market enterprises in Western Canada.

Š During the current year, the Company partnered with Rogers to form shomi, a new subscription video-on-demand service having the latest most exclusive shows and selections personalized for viewers. The servicewas launched in beta in early November 2014 and was made available to all Canadians in August 2015.

Š During 2013, the Company granted Rogers Communications Inc. (“Rogers”) an option to acquire its wirelessspectrum licenses. The exercise of the option and the sale of the wireless spectrum licenses were subject tovarious regulatory approvals and therefore, the licenses were not classified as held for sale. During the fiscal2015, the regulatory reviews concluded at which time Rogers exercised its option and the transfer wascompleted. The Company had previously received $50 in respect of the purchase price of the option toacquire wireless spectrum licenses and a $200 deposit in respect of the option exercise price. The Companyreceived an additional $100 when the transaction completed and recorded a gain of $158.

Š During 2014, the Company completed sale of its 50% interest in its two French-language channels, Historiaand Series+, to Corus.

Š During 2013, the Company established a notional fund, the accelerated capital fund, of up to $500 million withproceeds received, and to be received, from the strategic transactions with each of Rogers and Corus. Acceleratedcapital initiatives are being funded through this fund and not cash generated from operations. Key investmentsinclude the Calgary data centres, further digitization of the network and additional bandwidth upgrades,development of IP delivery of video, expansion of the WiFi network, and additional innovative product offeringsrelated to Shaw Go and other applications to provide an enhanced customer experience. Approximately $110million was invested in fiscal 2013, $240 million in fiscal 2014, and $150 million in fiscal 2015.

Š The Company continued to expand on its TV Everywhere content strategy launching Global Go and a number ofShaw Go apps during fiscal 2014, giving subscribers on-the-go access to their favorite programming.

Š Shaw also continued to invest in and build awareness of Shaw Go WiFi and as at August 31, 2015 had almost75,000 access points and 2 million devices authenticated on the network, reflecting the value of the service tocustomers.



Revenue and operating expenses

Consolidated revenue of $5.49 billion and operating income before restructuring costs and amortization of $2.38 billion forfiscal 2015 improved 4.7% and 5.2%, respectively, over 2014. Revenue growth due to the addition of the new BusinessInfrastructure Services division and customer growth in the Business Network Services division was partially offset by revenuedeclines in the Consumer and Media segments. The decline in Consumer revenue was primarily due to higher promotionalamounts and video and phone subscriber losses including the one-time effect of the CRTC decision mandatingtelecommunication providers remove the 30-day cancellation notice requirement, the total of which was partially offset by rateadjustments effective in 2015 and growth in Internet subscribers. The decrease in Media was driven by specialty channeladvertising revenue declines reflecting general market softness combined with the effect of the disposition of Historia andSeries+ in the prior year. Improvements in operating income before restructuring costs and amortization are primarily attributedto the acquisition of ViaWest and Consumer division rate increases introduced in fiscal 2015 offset partially by increase inprogramming fees and promotional discounts.

Consolidated revenue of $5.24 billion and operating income before restructuring costs and amortization of $2.26 billion for2014 both improved 1.9% over 2013. Revenue growth was primarily driven by consumer pricing adjustments and growth inBusiness which was partially reduced by lower video subscribers, higher programming costs, increased operating costs related tothe new Anik G1 satellite which launched in the third quarter of fiscal 2013 and higher employee related amounts. In addition,the 2013 fiscal year benefited from a one-time adjustment to align certain broadcast license fees with the CRTC billing periodtotaling approximately $14 million.

Amortization

(millions of Canadian dollars) 2015 2014Change

%

Amortization revenue (expense)Deferred equipment revenue 78 69 13.0Deferred equipment costs (164) (142) 15.5Property, plant and equipment, intangibles and other (809) (692) 16.9

Amortization of deferred equipment revenue and deferred equipment costs increased over the comparable year primarily due tothe impact of the fluctuation in the sales mix of equipment, timing and volume of sales and amortization periods for amounts inrespect of customer premise equipment, as well as changes in customer pricing on certain equipment.

Amortization of property, plant and equipment, intangibles and other increased over the comparable year primarily due to theimpact of the acquisition of ViaWest on September 2, 2014.

Amortization of financing costs and interest expense


%

Amortization of financing costs – long-term debt 4 3 33.3Interest expense 283 266 6.4

Interest expense increased over the comparable year primarily due to the impact of ViaWest’s debt and the drawdown ofUS$330 million on the Company’s credit facility to partially finance the acquisition of ViaWest on September 2, 2014 whichwas partially offset by the combined impact of a lower average cost of borrowing and an increase in capitalized interest.



Other income and expenses

(millions of Canadian dollars) 2015 2014

Increase(decrease)

inincome

Gain on sale of media assets – 49 (49)Business acquisition costs (6) (4) (2)Accretion of long-term liabilities and provisions (3) (6) 3Debt retirement costs – (8) 8Equity loss of a joint venture (56) – (56)Gain on sale of wireless spectrum licenses 158 – 158Impairment of goodwill (15) – (15)Other losses (49) (6) (43)

During 2013, the Company agreed to sell its 50% interest in its two French-language channels, Historia and Series+, to Corus,a related party subject to common voting control. The sale of Historia and Series+ closed on January 1, 2014 and the companyrecorded proceeds of $141 million and a gain of $49 million.

The Company incurred $6 million of acquisition related costs in fiscal 2015 for professional fees paid to lawyers, consultantsand advisors in respect of the acquisition of ViaWest which closed on September 2, 2014. In fiscal 2014, the Companyincurred $4 million of acquisition costs related to ViaWest.

The Company records accretion expense in respect of the discounting of certain long-term liabilities and provisions which areaccreted to their estimated value over their respective terms. The expense is primarily in respect of CRTC benefit obligations.

On February 18, 2014, the Company redeemed the $600 million 6.50% senior notes due June 2, 2014. In connection withthe early redemption, the Company incurred costs of $7 million and wrote-off the remaining finance costs of $1 million.

The Company recorded an equity loss of $56 million in fiscal 2015 related to its interest in shomi, the subscription video-on-demand service launched in early November 2014. The equity loss includes amounts in respect of the development and launchof the business.

During the year, Rogers Communications Inc. exercised its option to acquire the Company’s AWS spectrum as announced inJanuary 2013. Previously the Company received $50 million in respect of the purchase price of the option to acquire wirelessspectrum licenses and a $200 million deposit in respect of the option exercise price. The Company received an additional$100 million when the transaction completed and recorded a gain of $158 million.

As a result of the Company’s annual impairment test of goodwill and indefinite-life intangibles, an impairment charge of $15million was recorded in fiscal 2015 with respect to the Tracking operations in the Business Network Services division.

Other losses category generally includes realized and unrealized foreign exchange gains and losses on U.S. dollar denominatedcurrent assets and liabilities, gains and losses on disposal of property, plant and equipment and minor investments, and theCompany’s share of the operations of Burrard Landing Lot 2 Holdings Partnership (“Partnership”). In the current year, thecategory also includes a write-down of $6 million in respect of the property classified as held for sale, distributions of $27million from a venture capital fund investment, a write-down of $27 million in respect of a private portfolio investment andadditional proceeds of $15 million related to the fiscal 2012 Shaw Court insurance claim while the comparative year includes arefund of $5 million from the Canwest CCAA plan implementation fund and proceeds of $6 million in respect of theaforementioned insurance claim. In addition, the current and prior year both include asset write-downs of $55 million and $6million, respectively. The write-down in the current period relates to assets in respect to development of a certain InternetProtocol Television (“IPTV”) platform which the Company has now abandoned.

Income tax expenseThe income tax expense was calculated using current statutory income tax rates of 25.7% for 2015 and 26.0% for 2014 andwas adjusted for the reconciling items identified in Note 23 to the Consolidated Financial Statements.



Earnings per share

(millions of Canadian dollars except per share amounts) 2015 2014Change

%

Net income 880 887 (0.8)Weighted average number of participating

shares outstanding during period (millions) 468 457 2.4Earnings per share

Basic 1.80 1.84 (2.2)Diluted 1.79 1.84 (2.7)

Net income

Net income was $880 million in 2015 compared to $887 million in 2014. The year-over-year changes are summarized in thetable below.

Net income decreased $7 million from the prior year. The current year included higher amortization and increased interestexpense partially offset by higher operating income before restructuring costs and amortization and lower income taxes. Netother costs and revenue in both years was impacted by various items including gains on sales of wireless spectrum licenses andmedia assets as well as write-downs of various assets while the current year also included an equity loss in a joint venture, animpairment charge for goodwill and distributions received from a venture capital fund investment.

(millions of Canadian dollars)

Increased operating income before restructuring costs and amortization 117Decreased restructuring costs 6Increased amortization (131)Increased interest expense (17)Change in other net costs and revenue(1) 4Decreased income taxes 14

(7)

(1) Net other costs and revenue includes gains on sales of wireless spectrum licenses and media assets, business acquisitioncosts, accretion of long-term liabilities and provisions, debt retirement costs, equity loss of a joint venture, impairment ofgoodwill and other losses as detailed in the Consolidated Statements of Income.



Subscriber statistics

August 31,2015

August 31,2014 Change

ConsumerVideo – Cable 1,764,523 1,867,304 (102,781)Video – Satellite 811,988 850,132 (38,144)Internet 1,774,374 1,761,881 12,493Phone 1,027,266 1,110,708 (83,442)

5,378,151 5,590,025 (211,874)

Business Network ServicesVideo – Cable 77,709 90,325 (12,616)Video – Satellite 31,435 30,491 944Internet 178,167 168,520 9,647Phone 284,785 264,626 20,159

572,096 553,962 18,134

5,950,247 6,143,987 (193,740)

SEGMENTED OPERATIONS REVIEW

Consumer

Financial highlights


%

Revenue 3,752 3,768 (0.4)Operating income before restructuring costs and amortization(1) 1,686 1,669 1.0Operating margin(1) 44.9% 44.3% 0.6pts

(1) Refer to Key performance drivers.

Consumer revenue for the year of $3.75 billion declined 0.4% compared to last year. The effect of price adjustments andgrowth in Internet was offset by higher promotional costs, reduced On-Demand revenues and lower video and phonesubscribers.

Operating income before restructuring costs and amortization of $1.69 billion increased 1.0% over the prior year. Theimprovement was primarily driven by revenue related growth attributed to rate increases partially offset by lower video andphone subscribers, higher programming fees and promotional discounts.

The current year also includes the effect of implementing the CRTC decision that mandated telecommunication providers couldno longer require customers to provide a minimum 30 day cancellation notice. The reduction in revenue and operating incomebefore restructuring costs and amortization for the 7.5 months affecting fiscal 2015 is approximately $13 million and $10million, respectively.

During the current year, the Company announced the reorganization of its call centre operations around centres of expertiseincluding technical service, sales and billing, loyalty care, technical field support, e-Care, payment solutions and satelliteoperations. The closure of the Edmonton contact centre and the downsizing of the Kelowna location were completed in thecurrent year with customer care roles realigned through expansions in Victoria, Vancouver, Winnipeg and Mississauga aroundcentres of expertise. The reorganization is expected to be substantially complete in January 2016 when the Calgary call centreoperations will close.



The Company completed the second phase of the DNU project in the Vancouver region during fiscal 2015. This second phaseconverted all remaining video signals to digital and allows the Company to double downstream capacity in the Vancouver marketcontributing to an enhanced current network and providing for future bandwidth growth. The Company will continue with itsDNU project through fiscal 2016 focusing on its other larger markets and enhancement projects.

Business Network Services



%

Revenue 520 484 7.4Operating income before restructuring costs and amortization(1) 256 240 6.7Operating margin(1) 49.2% 49.6% (0.4)pts


Revenue of $520 million 7.4% over the prior year primarily due to customer growth in both the small, medium and largeenterprise market segments.

Operating income before restructuring costs and amortization of $256 million improved 6.7% over the comparable year due tohigher revenue driven by customer growth, partially offset by various expense increases primarily related to employee hires insupport of operational growth as well as certain administrative costs.

During the current quarter the Company successfully launched a new phone product, “Smart Voice”, which provides a unifiedcommunications solution to small businesses that has typically been reserved for large scale enterprise organizations. Thisservice improves productivity by allowing employees to collaborate seamlessly across their desk phones, mobile devices andcomputers in the office, at a client’s business, from home or anywhere in between. In addition the Company also launched“Managed Hotel WiFi” utilizing proven Cisco technology to provide a cloud based WiFi product that is a fully managed solutionfor the hospitality market.

Business Infrastructure Services


(millions of Canadian dollars) 2015

Revenue 246Operating income before restructuring costs and amortization(1) 95Operating margin(1) 38.6%


On September 2, 2014, the Company acquired ViaWest, then one of the largest privately held providers of hybrid IT solutions inNorth America. Through this acquisition Shaw gained significant capabilities, scale and immediate expertise in the growingmarketplace for enterprise data services.

Revenue for the year was $246 million while operating income before restructuring costs and amortization was $95 million. Forinformation purposes, on a USD basis and excluding the impact of acquisition related costs, operating income beforerestructuring costs and amortization grew 10.6% on a full year basis over the comparable period.

ViaWest continues to experience solid demand for its hybrid IT solutions and cloud services and recently announced the launchof cloud recovery service enabling cloud-based backup and replication to further serve the growing IT infrastructure needs ofexisting and future customers. During the fourth quarter, ViaWest acquired AppliedTrust, which provides managed services with



a focus on IT security. The acquisition of AppliedTrust had minimal effect on operating results for the year. Also, the Companyopened two new facilities in the fall of 2015: the Hillsboro, Oregon flagship facility with over 50,000 square feet of space andthe Calgary, Alberta facility.

Media



%

Revenue 1,080 1,096 (1.5)Operating income before restructuring costs and amortization(1) 342 353 (3.1)Operating margin(1) 31.7% 32.2% (0.5)pts


Revenue and operating income before restructuring costs and amortization for the year were $1.08 billion and $342 million,respectively, compared to $1.10 billion and $353 million for the prior year. The revenue decline was primarily due to reducedadvertising revenues on specialty channels and the effect of the disposition in the prior year of Historia and Series+, which waspartially offset by increased subscriber and other revenues. Operating income before restructuring costs and amortizationdeclined due to the net revenue decrease and was partially offset by lower employee related, advertising, promotion and variousother costs. The prior year benefited by $6 million related to Historia and Series+ and $6 million related to a distant signalretransmission royalty adjustment while fiscal 2015 included $12 million of transactions with shomi.

Global delivered solid programming results throughout 2015 with a number of programs ranking in the top 10 or top 20nationally and across multiple major markets during the year. The conventional fall programming premiered through the monthof September and into October with a solid returning line-up combined with new programming.

Throughout the year, Media’s specialty portfolio held solid positions in the channel rankers and closed out the year with 6 ofthe top 20 channels. The fall programming launched in late fiscal 2015 with a strong stable of returning shows along with newprogramming.

Global News continues to retain the number one position in the western markets and continued focus on online and mobileaudiences have delivered strong growth in both page and video views. In addition, Global National was recognized as BestNational Newscast at the Canadian Screen Awards while Globalnew.ca was honoured with the Edward R. Murrow Award for thebest news website outside of the U.S. Further, the Media division continues to strengthen its position in efficient delivery ofnews with the recent consolidation of the production of its national and international segments for the morning news shows andhas implemented a streamlined process to deliver local late night and weekend newscasts into all markets.



Capital expenditures and equipment costs

Year ended August 31,


%

Consumer and Business Network ServicesNew housing development 106 94 12.8Success based 284 312 (9.0)Upgrades and enhancements 353 364 (3.0)Replacement 35 49 (28.6)Buildings and other 176 258 (31.8)

Total as per Note 24 to the audited annual consolidated financial statements 954 1,077 (11.4)

Business Infrastructure ServicesTotal as per Note 24 to the audited annual consolidated financial statements 152 – n/a

MediaBroadcast and transmission 8 10 (20.0)Buildings and other 8 8 –

Total as per Note 24 to the audited annual consolidated financial statements 16 18 (11.1)

Consolidated total as per Note 24 to the audited annual consolidated financial statements(1) 1,122 1,095 2.5

(1) Fiscal 2015 includes $150 million (2014 – $240 million) related to certain capital investments that were funded fromthe accelerated capital fund.

Capital investment was $1.12 billion in the current year and included $150 million of investment funded through theaccelerated capital fund. Capital investment for the comparable year of $1.10 billion included $240 million of acceleratedcapital fund investment. The accelerated capital fund initiatives which are now complete, included investment in new internaland external Calgary data centres, increasing network capacity, next generation delivery systems, back office infrastructureupgrades, and expediting the Shaw Go WiFi infrastructure build.

Consumer and business network servicesSuccess-based capital for the year of $284 million was lower by $28 million relative to the prior year. The decline was due toreduced costs related to the deployment of cable video rental units and lower gross customer additions, and reduced satellitevideo set top box activations for new and existing customers driven by the termination of the Satellite rental program, and lowerphone activity, partially offset by higher advanced Internet WiFi modem purchases and increased installations.

Investment in the combined Upgrades and Enhancement and Replacement categories was $388 million compared to $413million in the prior year. The decrease was mainly due to timing of investment in next generation video delivery systems,combined with lower spend in video, voice and mainline and drop upgrades. These favourable variances were partially offset byincreased investments related to bandwidth upgrades and business growth.

Investment in Buildings and other of $176 million for the year was down $82 million compared to the prior year. The decreaserelates to lower current year spend on the new internal data centre and Shaw Court refurbishment expenditures partially offsetby timing of investment on back office infrastructure upgrades.

New housing development capital investment was up $12 million over the comparable year. The increase was due to timing ofspend on mainline expansion and continued activity in new housing starts for single and multifamily developments in westernCanada.



Business infrastructure servicesCapital investment of $152 million for the year is primarily related to growth related capital investment in core infrastructureand equipment to deploy customer solutions. The amounts include $39 million related to investment in Canada.

ViaWest completed construction of its new facility in Hillsboro, Oregon in fiscal 2015 and completed construction on the newflagship facility in Calgary in the fall of 2015. Each of these facilities will offer a comprehensive suite of infrastructure services,including colocation, cloud and other managed services.

MediaCapital investment for the year was $16 million compared to $18 million in the prior year as work continued on various projectsincluding upgrading production equipment, infrastructure and facility investments.

FINANCIAL POSITION

Total assets were $14.6 billion at August 31, 2015 compared to $13.2 billion at August 31, 2014. Following is a discussion ofsignificant changes in the consolidated statement of financial position since August 31, 2014. The impact of the acquisition ofViaWest includes the ongoing effects of foreign exchange differences arising on translation of those U.S. operations subsequentto acquisition.

Current assets decreased $324 million due to decreases in cash of $239 million, inventories of $59 million and accountsreceivable of $25 million. Cash decreased as the cash outlay for investing activities, including the acquisition of ViaWest,exceeded the funds provided by financing and operating activities. Accounts receivable decreased due to lower subscriber andadvertising receivables as a result of timing of collections, partially offset by the effect of the acquisition of ViaWest whileinventories were lower due to timing of equipment purchases and supply chain efficiencies.

Investments and other assets increased $37 million mainly due to the Company’s interest in shomi.

Property, plant and equipment increased $568 million due to the acquisition of ViaWest as well as current year capitalinvestment in excess of amortization. Other long-term assets decreased $24 million due to lower deferred equipment costs.Intangibles and goodwill increased $1.1 billion due to the acquisition of ViaWest, partially offset by the sale of the wirelessspectrum licenses.

Current liabilities increased $542 million due to increases in accounts payable and accrued liabilities of $59 million andcurrent portion of long-term debt of $608 million, partially offset by a decline in income taxes payable of $146 million.Accounts payable and accrued liabilities increased due to timing of payment and fluctuations in various payables includingcapital expenditures as well as the effect of the ViaWest acquisition. The current portion of long-term debt includes the $300million variable rate senior notes which are due in February 2016, the 6.15% senior notes due in May 2016 and amounts inrespect of ViaWest’s debt. Income taxes payable decreased due to tax instalment payments, partially offset by the current yearprovision.

Long-term debt increased $371 million due to ViaWest’s debt and borrowings under the Company’s credit facility of US$330million used to partially fund the acquisition of ViaWest, partially offset by the reclassification of the aforementioned seniornotes to current liabilities.

Other long-term liabilities decreased $65 million due to contributions to employee benefit plans, partially offset by current yearpension expense, and a decrease in CRTC benefit obligations.

Deferred credits decreased $274 million due to completion of the sale of the spectrum licenses as the Company had previouslyreceived $50 million in respect of the purchase price of the option to acquire wireless spectrum licenses and a $200 milliondeposit in respect of the option exercise price during fiscal 2013.

Deferred income tax liabilities, net of deferred income tax assets, increased $42 million due to amounts arising on theacquisition of ViaWest, partially offset by the current year income tax recovery.

Shareholders’ equity increased $709 million primarily due to increases in share capital of $318 million and retained earningsof $294 million and a decrease in accumulated other comprehensive loss of $114 million, partially offset by a decrease of $19



million in contributed surplus. Share capital increased due to the issuance of 11,865,236 Class B Non-Voting Shares under theCompany’s option plan and DRIP. As of November 15, 2015, share capital is as reported at August 31, 2015 with theexception of the issuance of a total of 1,354,808 Class B Non-Voting Shares upon exercise of options under the Company’soption plan and the DRIP. Retained earnings increased due to current year earnings of $856 million, partially offset bydividends of $562 million. Accumulated other comprehensive loss decreased due to the net effect of exchange differencesarising on the translation of ViaWest and U.S. dollar denominated debt designated as a hedge of the Company’s net investmentin those foreign operations. Contributed surplus decreased due to the transfer of the fair value of options to share capital uponexercise.

CONSOLIDATED CASH FLOW ANALYSIS

Operating activities


%

Funds flow from operations 1,637 1,524 7.4Net change in non-cash working capital balances related to operations (97) 216 >100.0

1,540 1,740 (11.5)

Funds flow from operations increased over the last year primarily due to higher operating income before restructuring costs andamortization, a decline in CRTC benefit obligation funding and lower expenditures on program rights and restructuring charges,all of which were partially offset by an increase in funding of defined benefit pension plans and higher interest expense. The netchange in non-cash working capital balances related to operations fluctuated over the comparative periods due to the timing ofpayment of current income taxes payable and accounts payable and accrued liabilities as well as fluctuations in accountsreceivable.

Investing activities

(millions of Canadian dollars) 2015 2014 Increase

Cash flow used in investing activities (1,904) (1,029) 875

The cash used in investing activities increased over the comparative year due to the proceeds on the sale of Historia andSeries+ in the prior year and the acquisition of ViaWest in the current year as well as an increased net cash outlay in respect ofinvestments, including shomi, all of which were partially offset by the net proceeds received on the sale of the wirelessspectrum licenses and lower cash outlays for capital expenditures and inventory.



Financing activities

The changes in financing activities during 2015 and 2014 were as follows:

(millions of Canadian dollars) 2015 2014

Bank loans – net borrowings 361 -ViaWest’s credit facilities (net) and finance lease obligations 52 -Issuance of 4.35% senior unsecured notes – 500Issuance of floating rate senior unsecured notes – 300Redeem 6.5% senior unsecured notes – (600)Repay 7.5% senior unsecured notes – (350)Bank facility arrangement costs (14) –Repay promissory note – (48)Prepay Partnership mortgage – (19)Partnership mortgage loan proceeds – 40Senior notes issuance costs – (4)Debt retirement costs – (7)Dividends (382) (352)Issuance of Class B Non-Voting Shares 129 70Distributions paid to non-controlling interests (22) (26)

124 (496)

LIQUIDITY AND CAPITAL RESOURCES

In the current year, the Company generated $653 million of free cash flow. Shaw used its free cash flow along with cash of$239 million, borrowings of $361 million under its credit facility, proceeds on issuance of Class B Non-Voting Shares of $129million, net proceeds of $99 million in respect of the sale of the wireless spectrum licenses, the net increase in borrowings of$56 million under the ViaWest facilities, cash distributions from a venture capital fund and proceeds from sale of investmentsof $29 million and other net items of $19 million to finance the $893 million acquisition of ViaWest, pay common sharedividends of $369 million, fund $150 million of accelerated capital spend, make $125 million in financial investments andpay $48 million of restructuring costs.

On March 30, 2015, the Company announced that a syndicate of lenders provided a term loan in the amount of US$395million and a revolving credit facility of US$85 million for ViaWest. The facilities were used to repay the outstanding amountsunder ViaWest’s prior credit facility and for ViaWest’s general corporate purposes. The term loan matures in March 2022 whilethe revolving credit facility matures in March 2020.

On December 22, 2014, the Company announced that it amended the terms of its $1 billion bank credit facility to extend thematurity date from January 2017 to December 2019. The facility is used for general corporate purposes.

The Company’s DRIP allows holders of Class A Shares and Class B Non-Voting Shares who are residents of Canada toautomatically reinvest monthly cash dividends to acquire additional Class B Non-Voting Shares. Class B Non-Voting Sharesdistributed under the Company’s DRIP are new shares issued from treasury at a 2% discount from the 5 day weighted averagemarket price immediately preceding the applicable dividend payment date. The DRIP has resulted in cash savings andincremental Class B Non-Voting Shares of $166 million during fiscal 2015.

Based on available credit facilities and forecasted free cash flow, the Company expects to have sufficient liquidity to fundoperations and obligations during the upcoming fiscal year. On a longer-term basis, Shaw expects to generate free cash flow andhave borrowing capacity sufficient to finance foreseeable future business plans and refinance maturing debt.



Debt structure and financial policyShaw structures its borrowings generally on a standalone basis. With the exception of ViaWest, the borrowings of Shaw areunsecured. While certain non-wholly owned subsidiaries and ViaWest, its immediate parent and its subsidiaries are subject tocontractual restrictions which may prevent the transfer of funds to Shaw, there are no similar restrictions with respect to othersubsidiaries of the Company.

Shaw’s borrowings are subject to covenants which include maintaining minimum or maximum financial ratios. At August 31,2015, Shaw is in compliance with these covenants and based on current business plans, the Company is not aware of anycondition or event that would give rise to non-compliance with the covenants over the life of the borrowings.

As at August 31, 2015, the ratio of debt to operating income before restructuring costs and amortization for the Company is2.0 times. Having regard to prevailing competitive, operational and capital market conditions, the Board of Directors hasdetermined that having this ratio in the range of 2.0 to 2.5 times would be optimal leverage for the Company in the currentenvironment. Should the ratio fall below this, on an other than temporary basis, the Board may choose to recapitalize back intothis optimal range. The Board may also determine to increase the Company’s debt above these levels to finance specificstrategic opportunities such as a significant acquisition.

Off-balance sheet arrangement and guarantees

GuaranteesGenerally it is not the Company’s policy to issue guarantees to non-controlled affiliates or third parties; however, it has enteredinto certain agreements as more fully described in Note 25 to the Consolidated Financial Statements. As disclosed thereto,Shaw believes it is remote that these agreements would require any cash payment.

Contractual obligationsThe amounts of estimated future payments under the Company’s contractual obligations at August 31, 2015 are detailed in thefollowing table.

Payments due by period

(millions of Canadian dollars) TotalWithin1 year 2 –3 years 4 –5 years

More than5 years

Long-term debt(1) 9,051 905 943 2,166 5,037Operating obligations(2) 1,971 635 566 382 388Purchase obligations(3) 49 49 – – –Other obligations(4) 21 – 19 2 –

11,092 1,589 1,528 2,550 5,425

(1) Includes principal repayments and interest payments.(2) Includes maintenance and lease of satellite transponders, program related agreements, lease of transmission facilities

and premises and exclusive rights to use intellectual property in Canada.(3) Includes capital expenditure and inventory purchase commitments.(4) Includes other non-current financial liabilities.

ADDITIONAL INFORMATION

Additional information relating to Shaw, including the Company’s 2015 Annual Information Form can be found on SEDAR atwww.sedar.com.

COMPLIANCE WITH NYSE CORPORATE GOVERNANCE LISTING STANDARDS

Disclosure of the Company’s corporate governance practices which differ from the New York Stock Exchange (“NYSE”)corporate governance listing standards are posted on Shaw’s website, www.shaw.ca under Investors/Corporate Governance/Compliance with NYSE Corporate Governance Listing Standards.



CERTIFICATION

The Company’s Chief Executive Officer and Chief Financial Officer have filed certifications regarding Shaw’s disclosure controlsand procedures and internal control over financial reporting.

As at August 31, 2015, the Company’s management, together with its Chief Executive Officer and Chief Financial Officer, hasevaluated the effectiveness of the design and operation of each of the Company’s disclosure controls and procedures andinternal control over financial reporting. Based on these evaluations, the Chief Executive Officer and Chief Financial Officerhave concluded that the Company’s disclosure controls and procedures and the Company’s internal control over financialreporting are effective.

As permitted by SEC guidance, management has excluded its subsidiary, ViaWest, from this evaluation of the system of internalcontrol over financial reporting. Shaw completed the purchase of 100% of Viawest on September 2, 2014. Additionalinformation regarding this acquisition is included in Note 3 to the consolidated financial statements. ViaWest had assets andrevenues representing approximately 12% and 4%, respectively, of the related Consolidated Financial Statement amounts as ofand for the year ended August 31, 2015. Further information on ViaWest is included in Note 24 to the Consolidated FinancialStatements. ViaWest will be included in management’s evaluation of internal controls over financial reporting for the fiscal yearended August 31, 2016.

There were no changes in the Company’s internal controls over financial reporting during the fiscal year that have materiallyaffected or are reasonably likely to materially affect Shaw’s internal controls over financial reporting.

The design of any system of controls and procedures is based in part upon certain assumptions about the likelihood of certainevents. There can be no assurance that any design will succeed in achieving its stated goals under all potential futureconditions, regardless of how remote.


Shaw Communications Inc.Management’s Responsibility for Financial Statements andReport on Internal Control over Financial Reporting

November 23, 2015

Management’s Responsibility for Financial Reporting

The accompanying consolidated financial statements of Shaw Communications Inc. and all the information in this annual reportare the responsibility of management and have been approved by the Board of Directors.

The financial statements have been prepared by management in accordance with International Financial Reporting Standards.When alternative accounting methods exist, management has chosen those it deems most appropriate in the circumstances.Financial statements are not precise since they include certain amounts based on estimates and judgments. Management hasdetermined such amounts on a reasonable basis in order to ensure that the financial statements are presented fairly, in allmaterial respects. Management has prepared the financial information presented elsewhere in the annual report and hasensured that it is consistent with the financial statements.

Management has a system of internal controls designed to provide reasonable assurance that the financial statements areaccurate and complete in all material respects. The internal control system includes an internal audit function and anestablished business conduct policy that applies to all employees. Management believes that the systems provide reasonableassurance that transactions are properly authorized and recorded, financial information is relevant, reliable and accurate andthat the Company’s assets are appropriately accounted for and adequately safeguarded.

The Board of Directors is responsible for ensuring management fulfils its responsibilities for financial reporting and is ultimatelyresponsible for reviewing and approving the financial statements. The Board carries out this responsibility through its AuditCommittee.

The Audit Committee is appointed by the Board and its members are unrelated and independent. The Committee meetsperiodically with management, as well as the external auditors, to discuss internal controls over the financial reporting process,auditing matters and financial reporting issues; to satisfy itself that each party is properly discharging its responsibilities; and toreview the annual report, the financial statements and the external auditors’ report. The Audit Committee reports its findings tothe Board for consideration when approving the financial statements for issuance to the shareholders. The Committee alsoconsiders, for review by the Board and approval by the shareholders, the engagement or re-appointment of the external auditors.

The financial statements have been audited by Ernst & Young LLP, the external auditors, in accordance with Canadian generallyaccepted auditing standards on behalf of the shareholders. Ernst & Young LLP has full and free access to the Audit Committee.

Management’s Report on Internal Control over Financial Reporting

Management is responsible for establishing and maintaining an adequate system of internal control over financial reporting.Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability offinancial reporting and the preparation of the financial statements for external purposes in accordance with generally acceptedaccounting principles.

Due to its inherent limitations, internal control over financial reporting may not prevent or detect misstatements on a timelybasis. Also, projections of any evaluation of the effectiveness of internal control to future periods are subject to the risk that thecontrols may become inadequate because of changes in conditions, or that the degree of compliance with the policies andprocedures may deteriorate. Therefore, even those systems determined to be effective can provide only reasonable assurancewith respect to the financial statement preparation and presentation.

Management conducted an evaluation of the effectiveness of the system of internal control over financial reporting based on theframework in “Internal Control – Integrated Framework (2013)” issued by the Committee of Sponsoring Organizations of theTreadway Commission. Based on this evaluation, management concluded that the Company’s system of internal control overfinancial reporting was effective as at August 31, 2015.

As permitted by SEC guidance, management has excluded its subsidiary, ViaWest, Inc. (“ViaWest”), from this evaluation of thesystem of internal control over financial reporting. Shaw completed the purchase of 100% of ViaWest on September 2, 2014.Additional information regarding this acquisition is included in Note 3 to the Consolidated Financial Statements. ViaWest hadassets and revenues representing approximately 12% and 4%, respectively, of the related Consolidated Financial Statementamounts as of and for the year ended August 31, 2015. Further information on ViaWest is included in Note 24 to the


Shaw Communications Inc.Management’s Responsibility for Financial Statements andReport on Internal Control over Financial Reporting

Consolidated Financial Statements. ViaWest will be included in management’s evaluation of internal controls over financialreporting for the fiscal year ended August 31, 2016.

[Signed] [Signed]

Brad ShawChief Executive Officer

Vito CulmoneExecutive Vice President and Chief Financial Officer


Shaw Communications Inc.Independent Auditors’ Report of Registered Public Accounting Firm

To the Shareholders of Shaw Communications Inc.

We have audited the accompanying consolidated financial statements of Shaw Communications Inc., which comprise theconsolidated statements of financial position as at August 31, 2015 and 2014, and the consolidated statements of income,comprehensive income, changes in shareholders’ equity and cash flows for the years ended August 31, 2015 and 2014, and asummary of significant accounting policies and other explanatory information.

Management’s Responsibility for the Consolidated Financial StatementsManagement is responsible for the preparation and fair presentation of these consolidated financial statements in accordancewith International Financial Reporting Standards as issued by the International Accounting Standards Board, and for suchinternal control as management determines is necessary to enable the preparation of consolidated financial statements that arefree from material misstatement, whether due to fraud or error.

Auditors’ ResponsibilityOur responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted ouraudits in accordance with Canadian generally accepted auditing standards and the standards of the Public Company AccountingOversight Board (United States). Those standards require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidatedfinancial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks ofmaterial misstatement of the consolidated financial statements, whether due to fraud or error. In making those riskassessments, the auditors consider internal control relevant to the entity’s preparation and fair presentation of the consolidatedfinancial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includesexamining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements,evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made bymanagement, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that the audit evidence we have obtained in our audits is sufficient and appropriate to provide a basis for our auditopinion.

OpinionIn our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of ShawCommunications Inc. as at August 31, 2015 and 2014, and its financial performance and its cash flows for the years endedAugust 31, 2015 and 2014 in accordance with International Financial Reporting Standards as issued by the InternationalAccounting Standards Board.

Other MatterWe have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States),Shaw Communication Inc.’s internal control over financial reporting as of August 31, 2015, based on the criteria established inInternal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission2013 framework and our report dated November 23, 2015 expressed an unqualified opinion on Shaw Communications Inc.’sinternal control over financial reporting.

Calgary, CanadaNovember 23, 2015

Chartered Accountants


Shaw Communications Inc.Independent Auditors’ Report on Internal Controls under Standards of the Public Company AccountingOversight Board (United States)

To the Shareholders of Shaw Communications Inc.

We have audited Shaw Communications Inc.’s internal control over financial reporting as at August 31, 2015, based on thecriteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of theTreadway Commission 2013 framework (the COSO criteria). Shaw Communications Inc.’s management is responsible formaintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control overfinancial reporting included in the accompanying Management Report on Internal Control over Financial Reporting. Ourresponsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States).Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internalcontrol over financial reporting was maintained in all material respects. Our audit included obtaining an understanding ofinternal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the designand operating effectiveness of internal control based on the assessed risk, and performing such other procedures as weconsidered necessary in the circumstances. We believe our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding thereliability of financial reporting and the preparation of financial statements for external purposes in accordance withInternational Financial Reporting Standards as issued by the International Accounting Standards Board. A company’s internalcontrol over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, inreasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) providereasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordancewith IFRS, and that receipts and expenditures of the company are being made only in accordance with authorization ofmanagement and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financialstatements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequatebecause of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

As indicated in the accompanying Shaw Communications Inc.’s Management Report on Internal Control Over FinancialReporting, management’s assessment of and conclusion on the effectiveness of internal control over financial reporting did notinclude the internal controls of ViaWest, Inc., which is included in the August 31, 2015 consolidated financial statements ofShaw Communications Inc. and constituted $1,733 million of total assets as of August 31, 2015 and $246 million of revenuesfor the year then ended. Our audit of internal control over financial reporting of Shaw Communications Inc. also did not includean evaluation of the internal control over financial reporting of ViaWest, Inc..

In our opinion, Shaw Communications Inc. maintained, in all material respects, effective internal control over financialreporting as at August 31, 2015, based on the COSO criteria.

We have also audited, in accordance with Canadian generally accepted auditing standards and the standards of the PublicAccounting Oversight Board (United States), the consolidated statements of financial position of Shaw Communications Inc. asat August 31, 2015 and 2014, and the consolidated statements of income, comprehensive income, changes in shareholders’equity and cash flows for the years ended August 31, 2015 and 2014, and our report dated November 23, 2015 expressed anunqualified opinion thereon.

Calgary, CanadaNovember 23, 2015

Chartered Accountants


Shaw Communications Inc.Consolidated Statements of Financial Position

[millions of Canadian dollars]

August 31,2015

$

August 31,2014

$

ASSETSCurrentCash 398 637Accounts receivable [note 4] 468 493Inventories [note 5] 60 119Other current assets [note 6] 78 73Asset held for sale [note 3] 5 11

1,009 1,333Investments and other assets [notes 7 and 28] 97 60Property, plant and equipment [note 8] 4,220 3,652Other long-term assets [note 9] 259 283Deferred income tax assets [note 23] 14 26Intangibles [note 10] 7,459 7,198Goodwill [note 10] 1,506 698

14,564 13,250

LIABILITIES AND SHAREHOLDERS’ EQUITYCurrentAccounts payable and accrued liabilities [note 11] 887 828Provisions [note 12] 52 44Income taxes payable 195 341Unearned revenue 196 183Current portion of long-term debt [notes 13 and 28] 608 –

1,938 1,396Long-term debt [notes 13 and 28] 5,061 4,690Other long-term liabilities [notes 14 and 26] 186 251Provisions [note 12] 10 9Deferred credits [note 15] 588 862Deferred income tax liabilities [note 23] 1,135 1,105

8,918 8,313

Commitments and contingencies [notes 13, 25 and 26]

Shareholders’ equityCommon and preferred shareholders 5,409 4,702Non-controlling interests in subsidiaries 237 235

5,646 4,937

14,564 13,250

See accompanying notes

On behalf of the Board:

[Signed] [Signed]JR Shaw Michael O’BrienDirector Director


Shaw Communications Inc.Consolidated Statements of Income

Years ended August 31 [millions of Canadian dollars except per share amounts]2015

$2014

$

Revenue [note 24] 5,488 5,241Operating, general and administrative expenses [note 21] (3,109) (2,979)Restructuring costs [notes 12 and 21] (52) (58)Amortization -

Deferred equipment revenue [note 15] 78 69Deferred equipment costs [note 9] (164) (142)Property, plant and equipment, intangibles and other [notes 8, 9, 10 and 15] (809) (692)

Operating income 1,432 1,439Amortization of financing costs – long-term debt [note 13] (4) (3)Interest expense [notes 13 and 24] (283) (266)Gain on sale of media assets [note 3] – 49Acquisition and divestment costs [note 3] (6) (4)Accretion of long-term liabilities and provisions (3) (6)Debt retirement costs [note 13] – (8)Equity loss of a joint venture [note 7] (56) –Gain on sale of wireless spectrum licenses [note 3] 158 –Impairment of goodwill [note 10] (15) –Other losses [note 22] (49) (6)

Income before income taxes 1,174 1,195Current income tax expense [note 23] 356 354Deferred income tax recovery [note 23] (62) (46)

Net income 880 887

Net income attributable to:Equity shareholders 856 857Non-controlling interests in subsidiaries 24 30

880 887

Earnings per share [note 18]Basic 1.80 1.84Diluted 1.79 1.84



Shaw Communications Inc.Consolidated Statements of Comprehensive Income

2015 2014Years ended August 31 [millions of Canadian dollars] $ $

Net income 880 887

Other comprehensive income (loss) [note 20]Items that may subsequently be reclassified to income:

Change in unrealized fair value of derivatives designated as cash flow hedges 6 3Adjustment for hedged items recognized in the period (6) (5)Unrealized loss on available-for-sale investment (3) (2)Exchange differences on translation of a foreign operation 184 –Exchange differences on US denominated debt hedging a foreign operation (74) –

107 (4)

Items that will not be subsequently reclassified to income:Remeasurements on employee benefit plans 7 (42)

114 (46)

Comprehensive income 994 841

Comprehensive income attributable to:Equity shareholders 970 811Non-controlling interests in subsidiaries 24 30

994 841



Shaw Communications Inc.Consolidated Statements of Changes in Shareholders’ Equity

Year ended August 31, 2015Attributable to equity shareholders

[millions of Canadian dollars]Sharecapital

Contributedsurplus

Retainedearnings

Accumulatedother

comprehensiveloss Total

Equityattributable

to non-controllinginterests

Totalequity

Balance as at September 1, 2014 3,182 64 1,589 (133) 4,702 235 4,937Net income – – 856 – 856 24 880Other comprehensive income – – – 114 114 – 114

Comprehensive income – – 856 114 970 24 994Dividends – – (396) – (396) – (396)Dividend reinvestment plan 166 – (166) – – – –Shares issued under stock option plan 152 (23) – – 129 – 129Share-based compensation – 4 – – 4 – 4Distributions declared by subsidiaries to non-

controlling interests – – – – – (22) (22)

Balance as at August 31, 2015 3,500 45 1,883 (19) 5,409 237 5,646

Year ended August 31, 2014Attributable to equity shareholders

[millions of Canadian dollars]Sharecapital

Contributedsurplus

Retainedearnings

Accumulatedother

comprehensiveloss Total

Equityattributable

to non-controllinginterests

Totalequity

Balance as at September 1, 2013 2,955 72 1,242 (87) 4,182 231 4,413Net income – – 857 – 857 30 887Other comprehensive loss – – – (46) (46) – (46)

Comprehensive income – – 857 (46) 811 30 841Dividends – – (364) – (364) – (364)Dividend reinvestment plan 146 – (146) – – – –Shares issued under stock option plan 81 (11) – – 70 – 70Share-based compensation – 3 – – 3 – 3Distributions declared by subsidiaries to non-

controlling interests – – – – – (26) (26)

Balance as at August 31, 2014 3,182 64 1,589 (133) 4,702 235 4,937



Shaw Communications Inc.Consolidated Statements of Cash Flows

2015 2014Years ended August 31 [millions of Canadian dollars] $ $

OPERATING ACTIVITIESFunds flow from operations [note 29] 1,637 1,524Net change in non-cash balances related to operations (97) 216

1,540 1,740

INVESTING ACTIVITIESAdditions to property, plant and equipment [note 24] (939) (976)Additions to equipment costs (net) [note 24] (72) (56)Additions to other intangibles [note 24] (79) (84)Net decrease (increase) to inventories 59 (23)Business acquisitions, net of cash acquired [note 3] (902) –Proceeds on sale of media assets [note 3] – 141Additions to investments and other assets (125) (52)Proceeds on disposal of property, plant and equipment [notes 24 and 29] 26 21Proceeds on sale of wireless spectrum licenses, net of costs [note 3] 99 –Distributions received and proceeds from sale of investments 29 –

(1,904) (1,029)

FINANCING ACTIVITIESIncrease in long-term debt 921 840Debt repayments (508) (969)Debt retirement costs [note 13] – (7)Senior notes issuance costs [note 13] – (4)Bank credit facility arrangement costs (14) –Repayment of promissory note [note 27] – (48)Issue of Class B Non-Voting Shares 129 70Dividends paid on Class A Shares and Class B Non-Voting Shares (369) (339)Dividends paid on Series A Preferred Shares (13) (13)Distributions paid to non-controlling interests in subsidiaries (22) (26)

124 (496)

Effect of currency translation on cash balances 1 –

Increase (decrease) in cash (239) 215Cash, beginning of year 637 422

Cash, end of year 398 637



Shaw Communications Inc.Notes to the Consolidated Financial StatementsAugust 31, 2015 and 2014[all amounts in millions of canadian dollars except share and per share amounts]

1. CORPORATE INFORMATIONShaw Communications Inc. (the “Company”) is a diversified Canadian communications company whose core operating businessis providing: Cable telecommunications and Satellite video services to residential customers (“Consumer”); data networking,Cable telecommunications, Satellite video and fleet tracking services to businesses and public sector entities (“BusinessNetwork Services”); data centre colocation, cloud technology and managed IT solutions to businesses (“Business InfrastructureServices”); and programming content (“Media”).

The Company was incorporated under the laws of the Province of Alberta on December 9, 1966 under the name Capital CableTelevision Co. Ltd. and was subsequently continued under the Business Corporations Act (Alberta) on March 1, 1984 under thename Shaw Cablesystems Ltd. Its name was changed to Shaw Communications Inc. on May 12, 1993. The Company’s sharesare listed on the Toronto Stock Exchange, TSX Venture Exchange and New York Stock Exchange. The registered office of theCompany is located at Suite 900, 630 – 3rd Avenue S.W., Calgary, Alberta, Canada T2P 4L4.

2. BASIS OF PRESENTATION AND ACCOUNTING POLICIES

Statement of compliance

These consolidated financial statements of the Company have been prepared in accordance with International FinancialReporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”).

The consolidated financial statements of the Company for the years ended August 31, 2015 and 2014, were approved by theBoard of Directors and authorized for issue on November 23, 2015.

Basis of presentation

These consolidated financial statements have been prepared primarily under the historical cost convention and are expressed inmillions of Canadian dollars unless otherwise indicated. Other measurement bases used are outlined below and in theapplicable notes. The consolidated statements of income are presented using the nature classification for expenses.

Basis of consolidation

(i) Subsidiaries

The consolidated financial statements include the accounts of the Company and those of its subsidiaries, which are entitiesover which the Company has control. Control exists when the Company has power over an investee, is exposed to or has rights tovariable returns from its involvement and has the ability to affect those returns. Intercompany transactions and balances areeliminated on consolidation. The results of operations of subsidiaries acquired during the period are included from theirrespective dates of acquisition, being the time at which the Company obtains control. Consolidation of a subsidiary ceases whenthe Company loses control. A change in ownership interests of a subsidiary, without a loss of control, is accounted for as anequity transaction. The Company assesses control through share ownership and voting rights.

Non-controlling interests arise from business combinations in which the Company acquires less than 100% ownership interest.At the time of acquisition, non-controlling interests are measured at either fair value or their proportionate share of the fairvalue of acquiree’s identifiable assets. The Company determines the measurement basis on a transaction by transaction basis.Subsequent to acquisition, the carrying amount of non-controlling interests is increased or decreased for their share of changesin equity.

(ii) Joint operations

A joint operation is a type of joint arrangement whereby the parties that have joint control of the arrangement have rights to theassets and obligations for the liabilities, relating to the joint arrangement. Joint control is the contractually agreed sharing ofcontrol of an arrangement, which exists only when decisions about the relevant activities require unanimous consent of theparties sharing control. The consolidated financial statements include the Company’s proportionate share of the assets,liabilities, revenues, and expenses of its interests in joint operations.



The Company’s joint operations include a 33.33% interest in the Burrard Landing Lot 2 Holdings Partnership (the“Partnership”) and until January 1, 2014, a 50% interest in Historia and Series+ s.e.nc (“Historia and Series+”).

The Partnership owns and leases commercial space in Shaw Tower in Vancouver, BC, which is the Company’s headquarters forits lower mainland operations. In classifying its 33.33% interest in the Partnership as a joint operation, the Companyconsidered the terms and conditions of the partnership agreement and other facts and circumstances including the primarypurpose of Shaw Tower which is to provide lease space to the partners.

Historia and Series+ are two Canadian French-language specialty television channels. The Company classified its 50% interestas a joint operation after considering the terms and conditions of the partnership agreement and other facts and circumstancesincluding the significant obligations that arise with respect to the CRTC broadcasting licenses which are required to operate thechannels and which are held at the partner level.

Investments in associates and joint ventures

Associates are entities over which the Company has significant influence. Significant influence is the power to participate in theoperating and financial policies of the investee, but is not control or joint control.

A joint venture is a type of joint arrangement whereby the parties that have joint control of the arrangement have rights to thenet assets of the joint arrangement. Joint control is the contractually agreed sharing of control of an arrangement, which existsonly when decisions about the relevant activities require unanimous consent of the parties sharing control.

Investments in associates and joint ventures are accounted for using the equity method. Investments of this nature are recordedat original cost and adjusted periodically to recognize the Company’s proportionate share of the associate’s or joint venture’s netincome/loss and other comprehensive income/loss after the date of investment, additional contributions made and dividendsreceived.

The Company has classified its 50% interest in Shomi Partnership (“shomi”) after considering the terms and conditions of thepartnership agreement and other facts and circumstances including business plans to make the service available to subscribersof other distributors and as an over-the-top service for purchase by any subscriber.

Revenue and expenses

The Company has multiple deliverable arrangements comprised of upfront fees (subscriber connection, installation andcustomer premise equipment revenue) and related subscription and service revenue. Upfront fees charged to customers do notconstitute separate units of accounting, therefore these revenue streams are assessed as an integrated package.

(i) Revenue

Revenue from cable, Internet, Digital Phone and DTH customers includes subscriber revenue earned as services are provided.Satellite distribution services and telecommunications service revenue is recognized in the period in which the services arerendered to customers. Affiliate subscriber revenue is recognized monthly based on subscriber levels. Advertising revenues arerecognized in the period in which the advertisements are broadcast and recorded net of agency commissions as these amountsare paid directly to the agency or advertiser. When a sales arrangement includes multiple advertising spots, the proceeds areallocated to individual advertising spots under the arrangement based on relative fair values. Revenue from data centrecustomers includes colocation and other services revenue, including managed infrastructure revenue. Colocation revenue isrecognized on a straight-line line basis over the term of the customer contract. Other services revenue, including managedinfrastructure revenue, is recognized as the services are provided.

Subscriber connection fees received from customers are deferred and recognized as revenue on a straight-line basis over threeyears. Direct and incremental initial selling, administrative and connection costs related to subscriber acquisitions arerecognized as an operating expense as incurred. The costs of physically connecting a new home are capitalized as part of thedistribution system and costs of disconnections are expensed as incurred.



Initial setup fees related to the installation of data centre services and installation revenue received on contracts withcommercial business customers are deferred and recognized as revenue on a straight-line basis over the related servicecontract, which generally span two to ten years. Direct and incremental costs associated with the installation of services orservice contract, in an amount not exceeding the upfront revenue, are deferred and recognized as an operating expense on astraight-line basis over the same period.

(ii) Deferred equipment revenue and deferred equipment costs

Revenue from sales of DTH equipment and DCTs is deferred and recognized on a straight-line basis over three yearscommencing when subscriber service is activated. The total cost of the equipment, including installation, represents aninventoriable cost which is deferred and recognized on a straight-line basis over the same period. The DCT and DTH equipmentis generally sold to customers at cost or a subsidized price in order to expand the Company’s customer base.

Revenue from sales of satellite tracking hardware and costs of goods sold is deferred and recognized on a straight-line basisover the related service contract for monthly service charges for air time, which is generally five years. The amortization of therevenue and cost of sale of satellite service equipment commences when goods are shipped.

Recognition of deferred equipment revenue and deferred equipment costs is recorded as deferred equipment revenueamortization and deferred equipment costs amortization, respectively.

(iii) Deferred IRU revenue

Prepayments received under indefeasible right to use (“IRU”) agreements are amortized on a straight-line basis into incomeover the term of the agreement and included in amortization of property, plant and equipment, intangibles and other in theconsolidated statements of income.

Cash

Cash is presented net of outstanding cheques. When the amount of outstanding cheques and the amount drawn under theCompany’s revolving term facility are greater than the amount of cash, the net amount is presented as bank indebtedness.

Allowance for doubtful accounts

The Company maintains an allowance for doubtful accounts for the estimated losses resulting from the inability of its customersto make required payments. In determining the allowance, the Company considers factors such as the number of days theaccount is past due, whether or not the customer continues to receive service, the Company’s past collection history andchanges in business circumstances.

Inventories

Inventories include subscriber equipment such as DCTs and DTH receivers, which are held pending rental or sale at cost or at asubsidized price. When subscriber equipment is sold, the equipment revenue and equipment costs are deferred and amortizedover three years. When the subscriber equipment is rented, it is transferred to property, plant and equipment and amortizedover its useful life. Inventories are determined on a first-in, first-out basis, and are stated at cost due to the eventual capitalnature as either an addition to property, plant and equipment or deferred equipment costs.



Property, plant and equipment

Property, plant and equipment are recorded at purchase cost. Direct labour and other directly attributable costs incurred toconstruct new assets, upgrade existing assets and connect new subscribers are capitalized as well as borrowing costs onqualifying assets. In addition, any asset removal and site restoration costs in connection with the retirement of assets arecapitalized. Repairs and maintenance expenditures are charged to operating expense as incurred. Amortization is recorded on astraight-line basis over the estimated useful lives of assets as follows:

Asset Estimated useful life

Cable and telecommunications distribution system 5-20 yearsDigital cable terminals and modems 2-5 yearsSatellite audio, video and data network equipment and DTH receiving equipment 3-15 yearsTransmitters, broadcasting and communication equipment 5-15 yearsBuildings 15-40 yearsData centre infrastructure 3-21 yearsData processing 3-4 yearsOther 3-20 years

The Company reviews the estimates of lives and useful lives on a regular basis.

Assets held for sale

Non-current assets and disposal groups are classified as held for sale when specific criteria are met and are measured at thelower of carrying amount and estimated fair value less costs to sell. Assets held for sale are not amortized and are reportedseparately on the statement of financial position.

Other long-term assets

Other long-term assets primarily include (i) equipment costs, as described in the revenue and expenses accounting policy,deferred and amortized on a straight-line basis over three to five years, (ii) credit facility arrangement fees amortized on astraight-line basis over the term of the facility, (iii) long-term receivables, (iv) network capacity leases, (v) the non-currentportion of prepaid maintenance and support contracts and (vi) direct costs in connection with initial setup fees and installationof services, as described in the revenue and expenses accounting policy, deferred and amortized on a straight-line basis overtwo to ten years.

Intangibles

The excess of the cost of acquiring businesses over the fair value of related net identifiable tangible and intangible assetsacquired is allocated to goodwill. Net identifiable intangible assets acquired consist of amounts allocated to broadcast rightsand licenses, trademarks, brands, program rights, customer relationships and software assets. Broadcast rights and licenses,trademarks and brands represent identifiable assets with indefinite useful lives. Spectrum licenses were acquired in IndustryCanada’s auction of licenses for advanced wireless services and have an indefinite life.

Program rights represent licensed rights acquired to broadcast television programs on the Company’s conventional and specialtytelevision channels and program advances are in respect of payments for programming prior to the window license start date.For licensed rights, the Company records a liability for program rights and corresponding asset when the license period hascommenced and all of the following conditions have been met: (i) the cost of the program is known or reasonably determinable,(ii) the program material has been accepted by the Company in accordance with the license agreement and (iii) the material isavailable to the Company for telecast. Program rights are expensed on a systematic basis generally over the estimated exhibitionperiod as the programs are aired and are included in operating, general and administrative expenses. Program rights aresegregated on the statement of financial position between current and noncurrent based on expected life at time of acquisition.

Customer relationships represent the value of customer contracts and relationships acquired in a business combination and areamortized on a straight-line basis over the estimated useful life of 15 years.



Software that is not an integral part of the related hardware is classified as an intangible asset. Internally developed softwareassets are recorded at historical cost and include direct material and labour costs as well as borrowing costs on qualifyingassets. Software assets are amortized on a straight-line basis over estimated useful lives ranging from three to ten years. TheCompany reviews the estimates of lives and useful lives on a regular basis.

Borrowing costs

The Company capitalizes borrowing costs on qualifying assets, for which the commencement date is on or after September 1,2010, that take more than one year to construct or develop using the Company’s weighted average cost of borrowing whichapproximated 6% (2014 – 6.25%).

Impairment

(i) Goodwill and indefinite-life intangibles

The Company tests goodwill and indefinite-life intangibles for impairment annually (as at March 1) and when events or changesin circumstances indicate that the carrying value may be impaired. The recoverable amount of each cash-generating unit(“CGU”) is determined based on the higher of the CGU’s fair value less costs to sell (“FVLCS”) and its value in use (“VIU”). ACGU is the smallest identifiable group of assets that generate cash flows that are independent of the cash inflows from otherassets or groups of assets. The Company’s cash generating units are Cable, Satellite, Media and Data centres. Where therecoverable amount of the CGU is less than its carrying amount, an impairment loss is recognized. Impairment losses relating togoodwill cannot be reversed in future periods.

(ii) Non-financial assets with finite useful lives

For non-financial assets, such as property, plant and equipment and finite-life intangible assets, an assessment is made at eachreporting date as to whether there is an indication that an asset may be impaired. If any indication exists, the recoverableamount of the asset is determined based on the higher of FVLCS and VIU. Where the carrying amount of the asset exceeds itsrecoverable amount, the asset is considered impaired and written down to its recoverable amount. Previously recognizedimpairment losses are reviewed for possible reversal at each reporting date and all or a portion of the impairment is reversed ifthe asset’s value has increased.

CRTC benefit obligations

The fair value of CRTC benefit obligations committed as part of business acquisitions are initially recorded at the present valueof amounts to be paid net of any expected incremental cash inflows. The obligation is subsequently adjusted for the incurrenceof related expenditures, the passage of time and for revisions to the timing of the cash flows. Changes in the obligation due tothe passage of time are recorded as accretion of long-term liabilities and provisions in the income statement.

Provisions

Provisions are recognized when the Company has a present obligation (legal or constructive) as a result of a past event, it isprobable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliableestimate can be made of the amount of the obligation. The timing or amount of the outflow may still be uncertain. Provisionsare measured using the best estimate of the expenditure required to settle the present obligation at the end of the reportingperiod, taking into account risks and uncertainties associated with the obligation. Provisions are discounted where the timevalue of money is considered material.

(i) Asset retirement obligations

The Company recognizes the fair value of a liability for an asset retirement obligation in the period in which it is incurred, on adiscounted basis, with a corresponding increase to the carrying amount of property and equipment, primarily in respect of



transmitter sites. This cost is amortized on the same basis as the related asset. The liability is subsequently increased for thepassage of time and the accretion is recorded in the income statement as accretion of long-term liabilities and provisions. Thediscount rates applied are subsequently adjusted to current rates as required at the end of reporting periods. Revisions due tothe estimated timing of cash flows or the amount required to settle the obligation may result in an increase or decrease in theliability. Actual costs incurred upon settlement of the obligation are charged against the liability to the extent recorded.

(ii) Restructuring provisions

Restructuring provisions, primarily in respect of employee termination benefits, are recognized when a detailed plan for therestructuring exists and a valid expectation has been raised to those affected that the plan will be carried out.

(iii) Other provisions

Provisions for disputes, legal claims and contingencies are recognized when warranted. The Company establishes provisionsafter taking into consideration legal assessments (if applicable), expected availability of insurance or other recourse and otheravailable information.

Deferred credits

Deferred credits primarily include: (i) prepayments received under IRU agreements amortized on a straight-line basis intoincome over the term of the agreement, (ii) equipment revenue, as described in the revenue and expenses accounting policy,deferred and amortized over three to five years, (iii) connection fee revenue, initial setup fees and upfront installation revenue,as described in the revenue and expenses accounting policy, deferred and amortized over two to ten years, (iv) a deposit on afuture fibre sale, and (v) amounts received in respect of granting an option to acquire its wireless spectrum licenses.

Leases

(i) Operating leases

Rent expense for real estate leases that have escalating lease payments is recorded on a straight-line basis over the term of thelease. The difference between the expense recorded and the amount paid is recorded as deferred rent and included in deferredcredits in the statement of financial position.

(ii) Finance leases

Leases of property and equipment that transfer substantially all the risks and rewards of ownership are classified as financeleases. Finance leases are capitalised at the commencement of the lease at the fair value of the leased property or, if lower, atthe present value of the minimum lease payments. Lease payments are apportioned between interest expense and reduction ofthe lease liability. The property and equipment acquired under finance leases is depreciated over the shorter of the useful life ofthe asset and the lease term.

Income taxes

The Company accounts for income taxes using the liability method, whereby deferred income tax assets and liabilities aredetermined based on differences between the financial reporting and tax bases of assets and liabilities measured usingsubstantively enacted tax rates and laws that will be in effect when the differences are expected to reverse. Deferred tax assetsand liabilities are offset if there is a legally enforceable right to offset and they relate to income taxes levied by the sameauthority in the same taxable entity. Income tax expense for the period is the tax payable for the period using tax ratessubstantively enacted at the reporting date, any adjustments to taxes payable in respect of previous years and any changeduring the period in deferred income tax assets and liabilities, except to the extent that they relate to a business combination ordivestment, items recognized directly in equity or in other comprehensive income. The Company records interest and penaltiesrelated to income taxes in income tax expense.



Tax credits and government grants

Until August 31, 2014, the Company had access to a government program which supported local programming produced byconventional television stations. In addition, the Company receives tax credits primarily related to its research and developmentactivities. Government financial assistance is recognized when management has reasonable assurance that the conditions of thegovernment programs are met and accounted for as a reduction of related costs, whether capitalized and amortized or expensedin the period the costs are incurred.

Foreign currency translation

Transactions originating in foreign currencies are translated into Canadian dollars at the exchange rate at the date of thetransaction. Monetary assets and liabilities are translated at the period-end rate of exchange and non-monetary items aretranslated at historic exchange rates. The net foreign exchange loss recognized on the translation and settlement of currentmonetary assets and liabilities was $8 (2014 – $8) and is included in other losses.

The functional currency of the Company’s foreign operations is US dollars. Assets and liabilities, including goodwill and fairvalue adjustments arising on acquisition, are translated into Canadian dollars using the foreign exchange rate at the end of thereporting period. Revenue and expenses are translated using average foreign exchange rates, which approximate the foreignexchange rates on the dates of the transactions. Foreign exchange differences arising on translation are included in othercomprehensive income/loss and accumulated in equity.

Financial instruments other than derivatives

Financial instruments have been classified as loans and receivables, assets available-for-sale, assets held-for-trading orfinancial liabilities. Cash has been classified as held-for-trading and is recorded at fair value with any change in fair valueimmediately recognized in income (loss). Other financial assets are classified as available-for-sale or as loans and receivables.Available-for-sale assets are carried at fair value with changes in fair value recorded in other comprehensive income (loss) untilrealized. Available-for-sale equity instruments not quoted in an active market and where fair value cannot be reliably measuredare recorded at cost less impairment. Loans and receivables and financial liabilities are carried at amortized cost. None of theCompany’s financial assets are classified as held-to-maturity and none of its financial liabilities are classified as held-for-trading.

Finance costs and discounts associated with the issuance of debt securities are netted against the related debt instrument andamortized to income using the effective interest rate method. Accordingly, long-term debt accretes over time to the principalamount that will be owing at maturity.

Derivative financial instruments and hedging activities

The Company uses derivative financial instruments, such as foreign currency forward purchase contracts, to manage risks fromfluctuations in foreign exchange rates. All derivative financial instruments are recorded at fair value in the statement offinancial position. Where permissible, the Company accounts for these financial instruments as hedges which ensures thatcounterbalancing gains and losses are recognized in income in the same period. With hedge accounting, changes in the fairvalue of derivative financial instruments designated as cash flow hedges are recorded in other comprehensive income (loss)until the variability of cash flows relating to the hedged asset or liability is recognized in income (loss). When an anticipatedtransaction is subsequently recorded as a non-financial asset, the amounts recognized in other comprehensive income (loss) arereclassified to the initial carrying amount of the related asset. Where hedge accounting is not permissible or derivatives are notdesignated in a hedging relationship, they are classified as held-for-trading and the changes in fair value are immediatelyrecognized in income (loss).

Instruments that have been entered into by the Company to hedge exposure to foreign currency risk are reviewed on a regularbasis to ensure the hedges are still effective and that hedge accounting continues to be appropriate.

A net investment hedge of a foreign operation is accounted for similarly to a cash flow hedge. The Company may designatecertain US dollar denominated debt as a hedge of its net investment in foreign operations where the US dollar is the functionalcurrency. Unrealized gains and losses arising from translation of the US dollar denominated debt are included in othercomprehensive income/loss and accumulated in equity.



Fair value measurements

Fair value estimates are made at a specific point in time, based on relevant market information and information about thefinancial instrument. These estimates are subjective in nature and involve uncertainties and matters of significant judgementand, therefore, cannot be determined with precision. Changes in assumptions could significantly affect the estimates.

The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observableor unobservable. Observable inputs reflect assumptions market participants would use in pricing an asset or liability based onmarket data obtained from independent sources while unobservable inputs reflect a reporting entity’s pricing based upon theirown market assumptions.

The fair value hierarchy consists of the following three levels:

Level 1 Inputs are quoted prices in active markets for identical assets or liabilities.

Level 2 Inputs for the asset or liability are based on observable market data, either directly or indirectly, other than quotedprices.

Level 3 Inputs for the asset or liability are not based on observable market data.

The Company determines whether transfers have occurred between levels in the fair value hierarchy by assessing the impact ofevents and changes in circumstances that could result in a transfer at the end of each reporting period.

Employee benefits

The Company accrues its obligations under its employee benefit plans, net of plan assets. The cost of pensions and otherretirement benefits earned by certain employees is actuarially determined using the projected benefit method pro-rated onservice and management’s best estimate of salary escalation and retirement ages of employees. Past service costs from planinitiation and amendments are recognized immediately in the income statement. Remeasurements include actuarial gains orlosses and the return on plan assets (excluding interest income). Actuarial gains and losses occur because assumptions aboutbenefit plans relate to a long time frame and differ from actual experiences. These assumptions are revised based on actualexperience of the plans such as changes in discount rates, expected retirement ages and projected salary increases.Remeasurements are recognized in other comprehensive income (loss) on an annual basis, at a minimum, and on an interimbasis when there are significant changes in assumptions.

August 31 is the measurement date for the Company’s employee benefit plans. The last actuarial valuations for fundingpurposes for the various plans were performed effective December 31, 2014 and the next actuarial valuations for fundingpurposes are effective December 31, 2015.

Share-based compensation

The Company has a stock option plan for directors, officers, employees and consultants to the Company. The options topurchase shares must be issued at not less than the fair value at the date of grant. Any consideration paid on the exercise ofstock options, together with any contributed surplus recorded at the date the options vested, is credited to share capital. TheCompany calculates the fair value of share-based compensation awarded to employees using the Black-Scholes option pricingmodel. The fair value of options are expensed and credited to contributed surplus over the vesting period of the options usingthe graded vesting method.

The Company has a deferred share unit (“DSU”) plan for its Board of Directors. Compensation cost is recognized immediatelyas DSUs vest when granted. DSUs will be settled in cash and the obligation is measured at the end of each period at fair valueusing the Black-Scholes option pricing model and the number of outstanding DSUs.

Share appreciation rights (“SARs”) issued by a subsidiary to eligible employees are cash settled and measured at fair valueusing the Black-Scholes option pricing model. The fair value is recognized over the vesting period of the SARs by applying thegraded vesting method, adjusting for estimated forfeitures. The obligation for SARs is remeasured at the end of each period upto the date of settlement which requires a reassessment of the estimates used at the end of each reporting period.



The Company has an employee share purchase plan (the “ESPP”) under which eligible employees may contribute to amaximum of 5% of their monthly base compensation. The Company contributes an amount equal to 25% of the participant’scontributions and records such amounts as compensation expense.

Earnings per share

Basic earnings per share is based on net income attributable to equity shareholders adjusted for dividends on preferred sharesand is calculated using the weighted average number of Class A Shares and Class B Non-Voting Shares outstanding during theperiod. Diluted earnings per share is calculated by considering the effect of all potentially dilutive instruments. In calculatingdiluted earnings per share, any proceeds from the exercise of stock options and other dilutive instruments are assumed to beused to purchase Class B Non-Voting Shares at the average market price during the period.

Guarantees

The Company discloses information about certain types of guarantees that it has provided, including certain types ofindemnities, without regard to whether it will have to make any payments under the guarantees.

Estimation uncertainty and critical judgements

The preparation of consolidated financial statements in conformity with IFRS requires management to make estimates andassumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at thedate of the consolidated financial statements and the reported amounts of revenues and expenses during the period. Actualresults could differ from those estimates and significant changes in assumptions could cause an impairment in assets. Thefollowing require the most difficult, complex or subjective judgements which result from the need to make estimates about theeffects of matters that are inherently uncertain.

Estimation uncertainty

The following are key assumptions concerning the future and other key sources of estimation uncertainty that could impact thecarrying amount of assets and liabilities and results of operations in future periods.

(i) Allowance for doubtful accounts

The Company is required to make an estimate of an appropriate allowance for doubtful accounts on its receivables. Theestimated allowance required is a matter of judgement and the actual loss eventually sustained may be more or less than theestimate, depending on events which have yet to occur and which cannot be foretold, such as future business, personal andeconomic conditions.

(ii) Property, plant and equipment

The Company is required to estimate the expected useful lives of its property, plant and equipment. These estimates of usefullives involve significant judgement. In determining these estimates, the Company takes into account industry trends andcompany-specific factors, including changing technologies and expectations for the in-service period of these assets.Management’s judgement is also required in determination of the amortization method, the residual value of assets and thecapitalization of labour and overhead.

(iii) Business combinations – purchase price allocation

Purchase price allocations involve uncertainty because management is required to make assumptions and judgements toestimate the fair value of the identifiable assets acquired and liabilities assumed in business combinations. Fair value estimatesare based on quoted market prices and widely accepted valuation techniques, including discounted cash flow (“DCF”) analysis.Such estimates include assumptions about inputs to the valuation techniques, industry economic factors and businessstrategies.



(iv) Impairment

The Company estimates the recoverable amount of its CGUs using a FVLCS calculation based on a DCF analysis. Significantjudgements are inherent in this analysis including estimating the amount and timing of the cash flows attributable to thebroadcast rights and licenses, the selection of an appropriate discount rate, and the identification of appropriate terminalgrowth rate assumptions. In this analysis the Company estimates the discrete future cash flows associated with the intangibleasset for five years and determines a terminal value. The future cash flows are based on the Company’s estimates of futureoperating results, economic conditions and the competitive environment. The terminal value is estimated using both aperpetuity growth assumption and a multiple of operating income before restructuring costs and amortization. The discountrates used in the analysis are based on the Company’s weighted average cost of capital and an assessment of the risk inherentin the projected cash flows. In analyzing the FVLCS determined by the DCF analysis, the Company also considers a marketapproach determining a recoverable amount for each unit and total entity value determined using a market capitalizationapproach. Recent market transactions are taken into account, when available. The key assumptions used to determine therecoverable amounts, including a sensitivity analysis, are included in note 10. The DCF analysis uses significant unobservableinputs and is therefore considered a level 3 fair value measurement.

(v) Employee benefit plans

The amounts reported in the financial statements relating to the defined benefit pension plans are determined using actuarialvaluations that are based on several assumptions including the discount rate and rate of compensation increase. While theCompany believes these assumptions are reasonable, differences in actual results or changes in assumptions could affectemployee benefit obligations and the related income statement impact. The most significant assumption used to calculate thenet employee benefit plan expense is the discount rate. The discount rate is the interest rate used to determine the presentvalue of the future cash flows that is expected will be needed to settle employee benefit obligations. It is based on the yield oflong-term, high-quality corporate fixed income investments closely matching the term of the estimated future cash flows and isreviewed and adjusted as changes are required.

(vi) Income taxes

The Company is required to estimate income taxes using substantively enacted tax rates and laws that will be in effect when thedifferences are expected to reverse. In determining the measurement of tax uncertainties, the Company applies a probableweighted average methodology. Realization of deferred income tax assets is dependent on generating sufficient taxable incomeduring the period in which the temporary differences are deductible. Although realization is not assured, management believesit is more likely than not that all recognized deferred income tax assets will be realized based on reversals of deferred incometax liabilities, projected operating results and tax planning strategies available to the Company and its subsidiaries.

(vii) Contingencies

The Company is subject to various claims and contingencies related to lawsuits, taxes and commitments under contractual andother commercial obligations. Contingent losses are recognized by a charge to income when it is likely that a future event willconfirm that an asset has been impaired or a liability incurred at the date of the financial statements and the amount can bereasonably estimated. Significant changes in assumptions as to the likelihood and estimates of the amount of a loss couldresult in recognition of additional liabilities.

Critical judgements

The following are critical judgements apart from those involving estimation:

(i) Determination of a CGU

Management’s judgement is required in determining the Company’s cash generating units for the impairment assessment of itsindefinite-life intangible assets. The CGUs have been determined considering operating activities and asset management andare Cable, Satellite, Media and Data centres.



(ii) Broadcast rights and licenses and spectrum licenses – indefinite-life assessment

The Company’s businesses are dependent upon broadcast licenses (or operate pursuant to an exemption order) granted andissued by the CRTC. While these licenses must be renewed from time to time, the Company has never failed to do so. Inaddition, there are currently no legal, regulatory or competitive factors that limit the useful lives of these assets.

Adoption of recent accounting pronouncement

The adoption of the following standard effective September 1, 2014 had no impact on the Company’s consolidated financialstatements.

Š IFRIC 21 Levies provides guidance on when to recognize a financial liability imposed by a government, if the levy isaccounted for in accordance with IAS 37 Provisions, Contingent Liabilities and Contingent Assets, or where the timingand amount of the levy is certain.

Standards, interpretations and amendments to standards issued but not yet effective

The Company has not yet adopted certain standards and interpretations that have been issued but are not yet effective. Thefollowing pronouncements are being assessed to determine the impact on the Company’s results and financial position.

Š Clarification of Acceptable Methods of Depreciation and Amortization (Amendments to IAS 16 Property, Plant andEquipment and IAS 38 Intangible Assets) prohibits revenue from being used as a basis to depreciate property, plant andequipment and significantly limits use of revenue-based amortization for intangible assets. The amendments are to beapplied prospectively for the annual period commencing September 1, 2016.

Š IFRS 15 Revenue from Contracts with Customers, was issued in May 2014 and replaces IAS 11 Construction Contracts,IAS 18 Revenue, IFRIC 13 Customer Loyalty Programs, IFRIC 15 Agreements for the Construction of Real Estate, IFRIC18 Transfers of Assets from Customers and SIC-31 Revenue – Barter Transactions Involving Advertising Services. Thenew standard requires revenue to be recognized to depict the transfer of promised goods or services to customers in anamount that reflects the consideration expected to be received in exchange for those goods or services. The principles areto be applied in the following five steps: (1) identify the contract(s) with a customer, (2) identify the performanceobligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performanceobligations in the contract, and (5) recognize revenue when (or as) the entity satisfies a performance obligation. The newstandard is to be applied either retrospectively or on a modified retrospective basis and is effective for the annual periodcommencing September 1, 2018.

Š IFRS 9 Financial Instruments: Classification and Measurement replaces IAS 39 Financial Instruments and applies aprincipal-based approach to the classification and measurement of financial assets and financial liabilities, including anexpected credit loss model for calculating impairment, and includes new requirements for hedge accounting. Thestandard is required to be applied retrospectively for the annual period commencing September 1, 2018.

3. BUSINESS ACQUISITIONS, ASSET DISPOSITIONS AND ASSET HELD FOR SALEBusiness acquisitions

ViaWest, Inc (“ViaWest”)

On September 2, 2014, the Company closed the acquisition of 100% of the shares of ViaWest for an enterprise value of US $1.2billion which was funded through a combination of cash on hand, assumption of ViaWest debt and a drawdown of US $330 onthe Company’s credit facility. The ViaWest acquisition provides the Company with a growth platform in the North American datacentre sector and is another step in expanding technology offerings for mid-market enterprises in Western Canada. The operatingresults of ViaWest are included in the Company’s consolidated financial statements from the date of acquisition. Revenue and netloss for 2015 were $246 and $17, respectively.

In connection with the transaction, the Company incurred $4 of acquisition related costs in fiscal 2014 for professional fees paidto lawyers, consultants and advisors. During the current year, the Company incurred additional acquisition related costs of $6.



The purchase consideration consisted of $898 of cash and issuance of share-based awards of $8. A summary of net assets andallocation of consideration is as follows:

$

Net assets acquired at assigned fair valuesCash and cash equivalents 5Receivables 10Other current assets 5Property and equipment 311Other long-term assets 2Intangibles(1) 404Goodwill, not deductible for tax(2) 674

1,411Current liabilities 16Current debt(3) 7Deferred income taxes 76Long-term debt(3) 406

906

(1) Intangibles include a trade name, customer relationships and software assets.

(2) Goodwill comprises the value of upside and expansion potential due to industry growth expectations and demand for datacentre services as well as a strong management team and an assembled workforce.

(3) Current and long-term debt is comprised of amounts that were outstanding under ViaWest’s credit facility, finance leaseobligations in respect of certain equipment and amounts owing to landlords in respect of financing leaseholdimprovements.

Other

Effective June 30, 2015, ViaWest acquired 100% of the shares of AppliedTrust Engineering, Inc. (“AppliedTrust”), a providerof security, compliance, DevOps and infrastructure consulting services to a wide range of clients. AppliedTrust’s capabilitiesaugment the ViaWest platform with fast enablement of secure hybrid services including IT assessment, migration, complianceconsulting, cloud readiness and deeper application support. The purchase consideration consisted of $9 in cash and contingentconsideration of $2.

A summary of net assets and preliminary allocation of consideration is as follows:

$

Net assets acquired at assigned fair valuesReceivables 1Goodwill, not deductible for tax(1) 10

11

(1) Goodwill comprises the estimated economic value of providing enhanced professional services offerings, growthexpectations as well as an assembled workforce with deep expertise in risk management and compliance consultingservices.



Asset dispositions

Sale of wireless spectrum licenses to Rogers Communications Inc. (“Rogers”)

During 2013, the Company granted Rogers an option to acquire its wireless spectrum licenses. The exercise of the option andthe sale of the wireless spectrum licenses were subject to various regulatory approvals and therefore, the licenses were notclassified as assets held for sale. The regulatory reviews concluded during 2015 at which time the transfer was completed. TheCompany had previously received $50 in respect of the purchase price of the option to acquire the wireless spectrum licensesand a $200 deposit in respect of the option exercise price. The Company received an additional $100 when the transactioncompleted and recorded a gain of $158.

Sale of Historia and Series+ to Corus Entertainment Inc. (“Corus”)

The sale of Historia and Series+ to Corus closed in 2014. Historia and Series+ represented a disposal group within the mediasegment and accordingly, were not presented as discontinued operations in the statement of income. The Company receivedsale proceeds of $141 and recorded a gain of $49.

Asset held for sale

A real estate property has been classified as held for sale in the statement of financial position at August 31, 2015 and 2014and measured at estimated fair value less costs to sell. At August 31, 2015, the property’s fair value was based on the salewhich closed subsequent to year end. Previously the estimated fair value had been determined by a commercial real estateservice by means of an income capitalization approach.

4. ACCOUNTS RECEIVABLE

2015$

2014$

Subscriber and trade receivables 473 506Due from related parties [note 27] 4 –Miscellaneous receivables 17 19

494 525Less allowance for doubtful accounts (26) (32)

468 493

Included in operating, general and administrative expenses is a provision for doubtful accounts of $29 (2014 – $38).

5. INVENTORIES

2015 2014$ $

Subscriber equipment 54 114Other 6 5

60 119

Subscriber equipment includes DTH equipment, DCTs and related customer premise equipment.



6. OTHER CURRENT ASSETS

2015 2014$ $

Program rights 15 17Tax indemnity 1 1Prepaid expenses and other 62 55

78 73

7. INVESTMENTS AND OTHER ASSETS

2015 2014$ $

Publicly traded company 4 7Investments in private entities 49 53Investment in a joint venture 44 –

97 60

During 2015, the Company recorded an unrealized loss of $3 (2014 – $2) in respect of its investment in a publicly tradedcompany (see note 20).

The Company has a portfolio of minor investments in various private entities.

The Company has a 50% joint control interest in shomi, which is a subscription video-on-demand service that launched inNovember 2014. The Company’s interest in shomi is accounted for using the equity method. Summarized financial informationat August 31, 2015 and for the ten months then ended is as follows:

$

Current assets 28Non-current assets 132Current liabilities (54)Non-current liabilities (16)

Partnership net assets 90

Carrying amount of the investment(1) 44

$

Revenue 18Expenses 128

Partnership net loss 110

Equity loss in the partnership(1) 56

(1) The Company’s carrying amount of the investment and equity loss does not equal 50% of the partnership’s net assetsand net loss due to elimination of unrealized profit on downstream transactions between the Company and shomi.



8. PROPERTY, PLANT AND EQUIPMENT

August 31, 2015 August 31, 2014

Cost$

Accumulatedamortization

$

Net bookvalue

$Cost

$


$

Net bookvalue

$

Cable and telecommunications distribution system 4,984 2,506 2,478 4,728 2,377 2,351Digital cable terminals and modems 808 447 361 833 483 350Satellite audio, video and data network and DTH receiving

equipment 174 96 78 186 83 103Transmitters, broadcasting, communications and production

equipment 109 62 47 104 50 54Land and buildings 625 207 418 441 181 260Data centre infrastructure, data processing and other 860 270 590 396 169 227Assets under construction 248 – 248 307 – 307

7,808 3,588 4,220 6,995 3,343 3,652

Changes in the net carrying amounts of property, plant and equipment for 2015 and 2014 are summarized as follows:

August 31,2014

August 31,2015

Net bookvalue

$Additions

$Transfers

$Acquisition

$Amortization

$

Disposalsand

writedown$

Foreignexchangetranslation

$

Net bookvalue

$

Cable and telecommunications distributionsystem 2,351 472 12 – (354) (3) – 2,478

Digital cable terminals and modems 350 205 – – (194) – – 361Satellite audio, video and data network and

DTH receiving equipment 103 – – – (25) – – 78Transmitters, broadcasting, communications

and production equipment 54 8 – – (15) – – 47Land and buildings 260 7 110 54 (26) – 13 418Data centre infrastructure, data processing

and other 227 107 93 256 (125) (19) 51 590Assets under construction 307 188 (215) 1 – (33) – 248

3,652 987 – 311 (739) (55) 64 4,220



August 31,2013

August 31,2014

Net bookvalue

$Additions

$Transfers

$Amortization

$

Disposalsand

writedown$

Net bookvalue

$

Cable and telecommunications distribution system 2,255 444 2 (341) (9) 2,351Digital cable terminals and modems 341 209 – (200) – 350Satellite audio, video and data network and DTH

receiving equipment 87 43 – (27) – 103Transmitters, broadcasting, communications and

production equipment 61 10 – (17) – 54Land and buildings 279 2 – (20) (1) 260Data processing and other 199 38 62 (50) (22) 227Assets under construction 148 223 (64) – – 307

3,370 969 – (655) (32) 3,652

In 2015, the Company recognized a gain of $6 (2014 – loss of $1) on the disposal of property, plant and equipment. The write-down of assets in 2015 was in respect of development of a certain Internet Protocol Television (“IPTV”) platform which formspart of the common infrastructure for the Consumer and Business Network Services divisions.

9. OTHER LONG-TERM ASSETS

2015 2014$ $

Equipment costs subject to a deferred revenue arrangement 225 247Customer equipment financing receivables 8 12Credit facility arrangement fees 3 2Other 23 22

259 283

Amortization provided in the accounts for 2015 amounted to $165 (2014 – $142) and was recorded as amortization ofdeferred equipment costs and other amortization.



10. INTANGIBLES AND GOODWILL

2015 2014$ $

Broadcast rights and licensesCable systems 4,015 4,015DTH and satellite services 1,013 1,013Television broadcasting 1,313 1,313

6,341 6,341Program rights and advances 280 293Goodwill

Non-regulated satellite services 73 88Cable and telecommunications systems 73 73Television broadcasting 537 537Data centre services 823 –

1,506 698Wireless spectrum licenses – 191Other intangibles

Software 275 256Customer relationships 472 79Trademark and brands 91 38

838 373

Net book value 8,965 7,896

Broadcast rights and licenses, trademark, brands and wireless spectrum licenses have been assessed as having indefinite usefullives. While licenses must be renewed from time to time, the Company has never failed to do so. In addition, there are currentlyno legal, regulatory, competitive or other factors that limit the useful lives of these assets.

The changes in the carrying amount of intangibles with indefinite useful lives, and therefore not subject to amortization, are asfollows:

Broadcastrights andlicenses

Trademark andbrands Goodwill

Wirelessspectrumlicenses

$ $ $ $

September 1, 2013 and 2014 6,341 38 698 191Business acquisitions [note 3] – 44 684 –Disposition [note 3] – – – (191)Write-down – – (15) –Foreign currency translation – 9 139 –

August 31, 2015 6,341 91 1,506 –



Intangibles subject to amortization are as follows:

August 31, 2015 August 31, 2014

Cost$


$

Net bookvalue

$Cost

$


$

Net bookvalue

$

Program rights and advances 671 376 295 699 389 310Software 241 150 91 227 139 88Software under construction 184 – 184 168 – 168Customer relationships 514 42 472 87 8 79

1,610 568 1,042 1,181 536 645Less current portion of program rights 15 17

1,027 628

The changes in the carrying amount of intangibles subject to amortization are as follows:

Program rightsand advances

$Software

$

Software underconstruction

$

Customerrelationships

$Total

$

September 1, 2013 300 108 108 85 601Additions 414 20 64 – 498Transfers – 4 (4) – –Amortization (404) (43) – (6) (453)Write-down – (1) – – (1)

August 31, 2014 310 88 168 79 645Additions 390 43 37 – 470Transfers – 3 (3) – –Business acquisition [note 3] – 5 – 355 360Amortization (405) (49) – (32) (486)Write-down – – (18) – (18)Foreign currency translation – 1 – 70 71

August 31, 2015 295 91 184 472 1,042

Impairment testing of indefinite-life intangibles and goodwill

The Company conducted its annual impairment test on goodwill and indefinite-life intangibles as at March 1, 2015 and as aresult, an impairment charge of $15 was recorded with respect to goodwill associated with the Tracking operations in theSatellite cash generating unit. The Company estimated the recoverable amount using a discounted cash flow analysis based onthe most recent estimates of future operating results which are reflective of long-term pressures as customers migrate fromsatellite based tracking to wireless tracking. The recoverable amount of the other cash generating units exceeded their carryingvalue.

A hypothetical decline of 10% in the recoverable amount of the broadcast rights and licenses for each of the Cable, Satelliteand Media cash generating units as at March 1, 2015 would not result in any impairment loss. The data centre cash generatingunit was created with the acquisition of ViaWest. A hypothetical decline of 10% in the recoverable amount of the data centrecash generating unit as at March 1, 2015 would result in an impairment loss and is reflective of the Company acquiringViaWest at fair value on September 2, 2014. A 1% increase in the discount rate or 1% decrease in the terminal growth ratewould cause the carrying amount of the Data centres CGU to exceed its recoverable amount by approximately $200 and $150,respectively. In order for the CGU’s recoverable amount to be equal to the carrying amount and holding all other assumptions



constant, the discount rate would have to be 8.75% or terminal growth rate would have to be 6%. These sensitivities areindicative only and should be considered with caution, as the effect of the variation in each assumption on the estimatedrecoverable amount is calculated in isolation without changing any other assumptions. The extent of any such impairment losswould be determined after incorporating any consequential effects of that change on estimated operating income beforerestructuring costs and amortization and on other factors. Any changes in economic conditions since the impairment testingconducted as at March 1, 2015 do not represent events or changes in circumstance that would be indicative of impairment atAugust 31, 2015.

Significant estimates inherent to this analysis include discount rates and the terminal value. At March 1, 2015, the estimatesthat have been utilized in the impairment tests reflect any changes in market conditions and are as follows:

Terminal value

Post-taxdiscount rate Terminal growth rate

Terminal operatingincome before

restructuring costs andamortization multiple

Cable 8.0% 1.0% 6.0XSatellite 8.5% 0.0% 5.0XMedia 8.5% 0.0% 6.5XData centres 8.5% 6.3% 10.0X

A sensitivity analysis of significant estimates is conducted as part of every impairment test. With respect to the impairmenttests performed in the third quarter, the estimated decline in recoverable amount for the sensitivity of significant estimates is asfollows:

Estimated decline in recoverable amountTerminal value

1% increase indiscount rate

1% decrease interminal growth rate

0.5 times decrease interminal operating

income beforerestructuring costs andamortization multiple

Cable 8.0% 5.0% 3.0%Satellite 7.0% n/a 3.0%Media 7.0% n/a 2.0%Data centres 19.0% 16.0% 2.0%

11. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

2015 2014$ $

Trade 81 44Program rights 79 74CRTC benefit obligations 28 30Accrued liabilities 339 335Accrued network fees 109 107Interest and dividends 229 215Related parties [note 27] 22 23

887 828



12. PROVISIONS

Assetretirementobligations Restructuring(1) Other Total

$ $ $ $

September 1, 2013 9 – 26 35Additions – 58 12 70Reversal – – (4) (4)Payments – (45) (3) (48)

August 31, 2014 9 13 31 53Additions 1 52 11 64Reversal – – (6) (6)Payments – (48) (1) (49)

August 31, 2015 10 17 35 62

Current – 13 31 44Long-term 9 – – 9

August 31, 2014 9 13 31 53

Current – 17 35 52Long-term 10 – – 10

August 31, 2015 10 17 35 62

(1) During 2014, the Company announced changes to the structure of its operating units to improve overall efficiency whileenhancing its ability to grow as the leading network and content experience company. In connection with therestructuring of its operations, approximately 400 management and non-customer facing roles were affected by theorganizational changes. During 2015, the Company announced a realignment of its customer care operations in theConsumer division into centres of expertise to enhance customer service, and continued its organizational structurerealignment efforts including further restructuring of certain functions within its Business Network Services division. Inaddition, the media division undertook organizational changes as it redefines itself from a traditional broadcaster to thebroader focus of a media organization. Approximately 1,700 employees were affected by the continued restructurings in2015. Restructuring amounts are primarily in respect of severance and employee related costs. The majority of remainingcosts at August 31, 2015 are expected to be paid within the next six months.



13. LONG-TERM DEBT2015 2014

Effectiveinterestrates

%

Long-termdebt at

amortizedcost(1)

$

Adjustmentfor

financecosts(1)

$

Long-termdebt

repayable atmaturity

$

Long-termdebt at

amortizedcost(1)

$

Adjustmentfor

financecosts(1)

$

Long-termdebt


$

CorporateBank loans Variable 434 – 434 – – –Cdn fixed rate senior notes-

6.15% due May 9, 2016 6.34 299 1 300 298 2 3005.70% due March 2, 2017 5.72 399 1 400 398 2 4005.65% due October 1, 2019 5.69 1,245 5 1,250 1,244 6 1,2505.50% due December 7, 2020 5.55 497 3 500 497 3 5004.35% due January 31, 2024 4.35 497 3 500 497 3 5006.75% due November 9, 2039 6.89 1,418 32 1,450 1,417 33 1,450

4,789 45 4,834 4,351 49 4,400Cdn variable rate senior notes-

Due February 1, 2016 300 – 300 299 1 3005,089 45 5,134 4,650 50 4,700

OtherViaWest – credit facility Variable 506 12 518 – – –ViaWest – other Various 34 – 34 – – –Burrard Landing Lot 2 Holdings Partnership 4.68 40 – 40 40 – 40

Total consolidated debt 5,669 57 5,726 4,690 50 4,740Less current portion 608 1 609 – – –

5,061 56 5,117 4,690 50 4,740

(1) Long-term debt is presented net of unamortized discounts and finance costs.

CorporateBank loans

During 2012, a syndicate of banks provided the Company with an unsecured $1 billion credit facility which includes amaximum revolving term or swingline facility of $50. During 2014, the Company amended the terms of the facility to extendthe maturity date from January 2017 to December 2019. The credit facility has a feature whereby the Company may request anadditional $500 of borrowing capacity so long as no event of default or pending event of default has occurred and is continuingor would occur as a result of the increased borrowings. No lender has any obligation to participate in the requested increaseunless it agrees to do so at its sole discretion. Funds are available to the Company in both Canadian and US dollars. AtAugust 31, 2015, $1 has been drawn as committed letters of credit against the revolving term facility. Interest rates fluctuatewith Canadian prime and bankers’ acceptance rates, US bank base rates and LIBOR rates. Excluding the revolving term facility,the effective interest rate on actual borrowings under the credit facility during 2015 was 1.57%. No amounts were drawn underthe under the credit facility during 2014. The effective interest rate on the revolving term facility for 2015 was 3.24% (2014 –3.38%).

Senior notesThe senior notes are unsecured obligations and rank equally and ratably with all existing and future senior indebtedness. Thefixed rate notes are redeemable at the Company’s option at any time, in whole or in part, prior to maturity at 100% of theprincipal amount plus a make-whole premium.

On January 31, 2014, the Company issued $500 senior notes at a rate of 4.35% due January 31, 2024 and $300 floating ratesenior rates due February 1, 2016. The $300 senior notes bear interest at an annual rate equal to three month CDOR plus0.69%.



Other

ViaWest

During 2015, ViaWest’s credit facility which was assumed on acquisition was repaid with proceeds from a new credit facility.ViaWest’s prior credit facility was scheduled to mature in May 2017 and was secured by a first priority security interest inspecific assets pursuant to the terms of the Security Agreement. On September 2, 2014, ViaWest’s credit facility consisted of aterm loan of US $322 and US $28 of borrowings under a US $40 revolving facility. The term loan had quarterly principalrepayments of US $1 with the balance due on maturity. Interest rates fluctuated with LIBOR, US prime, US Federal Funds andEurodollar rates. ViaWest had a US $130 interest rate swap which hedged the exposure to changes in cash flows and minimizedvariability related to its prior credit facility. The interest rate swap terminated in June 2015. The new facility consists of a termloan in the amount of US $395 and a revolving credit facility of US $85. Commencing August 2015, the term loan hasquarterly principal repayments of US $1 with the balance due on maturity in March 2022 while the revolving credit facilitymatures in March 2020. Interest rates fluctuate with LIBOR, US prime and US Federal Funds rates and the facilities aresecured by a first priority security interest in specific assets pursuant to the terms of the Security Agreement.

Finance lease obligations and amounts owing to landlords in connection with financing of leasehold improvements expire andmature at various dates through to 2023. Collateral has been provided as security for the related transactions and agreementsas required. The effective interest rates on the obligations range from 4.42% to 9.39%.

Burrard Landing Lot 2 Holdings Partnership (the “Partnership”)

The Company has a 33.33% interest in the Partnership which built the Shaw Tower project with office/retail space and living/working space in Vancouver, BC. In the fall of 2004, the commercial construction of the building was completed and at thattime, the Partnership issued ten year 6.31% secured mortgage bonds in respect of the commercial component of the ShawTower. In February 2014, the Partnership refinanced its debt. The Partnership received a mortgage loan and used the proceedsto prepay the outstanding balance of the previous mortgage and loan excess funds to each of its partners. The mortgage loanmatures on November 1, 2024 and bears interest at 4.683% compounded semi-annually with interest only payable for the firstfive years. The mortgage loan is collateralized by the property and the commercial rental income from the building with norecourse to the Company.

Debt retirement costs

On February 18, 2014, the Company redeemed the 6.50% senior notes. In connection with the early redemption, the Companyincurred costs of $7 and wrote-off the remaining finance costs of $1.

Debt covenants

The Company and its subsidiaries have undertaken to maintain certain covenants in respect of the credit agreements and trustindentures described above. The Company and its subsidiaries were in compliance with these covenants at August 31, 2015.

Long-term debt repayments

Mandatory principal repayments on all long-term debt in each of the next five years and thereafter are as follows:

$

2016 6092017 4082018 92019 102020 1,695Thereafter 2,995

5,726



Interest expense

2015$

2014$

Interest expense – long-term debt 299 281Amortization of senior notes discounts 2 2Interest income – short-term (net) (2) (5)Capitalized interest (16) (12)

283 266

14. OTHER LONG-TERM LIABILITIES

2015$

2014$

Pension liabilities [note 26] 119 174CRTC benefit obligations 23 48Post retirement liabilities [note 26] 22 18Share-based awards 11 –Program rights liabilities 5 5Other 6 6

186 251

15. DEFERRED CREDITS

2015$

2014$

IRU prepayments 449 461Equipment revenue 111 128Connection fee and installation revenue 24 19Proceeds on wireless spectrum license option [note 3] – 50Refundable deposit on wireless spectrum license [note 3] – 200Deposit on future fibre sale 2 2Other 2 2

588 862

Amortization of deferred credits for 2015 amounted to $100 (2014 – $89) and was recorded in the accounts as describedbelow.

IRU agreements are in place for periods ranging from 21 to 60 years and are being amortized to income over the agreementperiods. Amortization in respect of the IRU agreements for 2015 amounted to $12 (2014 – $12) and was recorded as otheramortization. Amortization of equipment revenue for 2015 amounted to $78 (2014 – $69). Amortization of connection fee andinstallation revenue for 2015 amounted to $10 (2014 – $8) and was recorded as revenue.



16. SHARE CAPITALAuthorized

The Company is authorized to issue a limited number of Class A voting participating shares (“Class A Shares”) of no par value,as described below, and an unlimited number of Class B non-voting participating shares (“Class B Non-Voting Shares”) of nopar value, Class 1 preferred shares, Class 2 preferred shares, Class A preferred shares and Class B preferred shares.

The authorized number of Class A Shares is limited, subject to certain exceptions, to the lesser of that number of shares(i) currently issued and outstanding and (ii) that may be outstanding after any conversion of Class A Shares into Class B Non-Voting Shares.

Issued and outstanding

2015 2014 2015 2014Number of securities $ $

22,420,064 22,420,064 Class A Shares 2 2451,471,562 439,606,326 Class B Non-Voting Shares 3,205 2,887

12,000,000 12,000,000 Series A Preferred Shares 293 293

485,891,626 474,026,390 3,500 3,182

Class A Shares and Class B Non-Voting Shares

Class A Shares are convertible at any time into an equivalent number of Class B Non-Voting Shares. In the event that a take-over bid is made for Class A Shares, in certain circumstances, the Class B Non-Voting Shares are convertible into an equivalentnumber of Class A Shares.

Changes in Class A Share capital and Class B Non-Voting Share capital in 2015 and 2014 are as follows:

Class A SharesClass B Non-Voting

SharesNumber $ Number $

September 1, 2013 22,520,064 2 430,306,542 2,660Class A share conversions (100,000) – 100,000 –Stock option exercises – – 3,431,548 81Dividend reinvestment plan – – 5,768,236 146

August 31, 2014 22,420,064 2 439,606,326 2,887Stock option exercises – – 5,871,621 152Dividend reinvestment plan – – 5,993,615 166

August 31, 2015 22,420,064 2 451,471,562 3,205

Series A Preferred Shares

The Cumulative Redeemable Rate Reset Preferred Shares, Series A (“Series A Preferred Shares”) represent a series of class 2preferred shares and are classified as equity since redemption, at $25.00 per Series A Preferred Share, is at the Company’soption and payment of dividends is at the Company’s discretion.

Share transfer restriction

The Articles of the Company empower the directors to refuse to issue or transfer any share of the Company that wouldjeopardize or adversely affect the right of Shaw Communications Inc. or any subsidiary to obtain, maintain, amend or renew alicense to operate a broadcasting undertaking pursuant to the Broadcasting Act (Canada).



17. SHARE-BASED COMPENSATION AND AWARDSStock option plan

Under a stock option plan, directors, officers, employees and consultants of the Company are eligible to receive stock options toacquire Class B Non-Voting Shares with terms not to exceed ten years from the date of grant. Options granted up to August 31,2015 vest evenly on the anniversary dates from the original grant date at either 25% per year over four years or 20% per yearover five years. The options must be issued at not less than the fair market value of the Class B Non-Voting Shares at the dateof grant. The maximum number of Class B Non-Voting Shares issuable under the plan may not exceed 52,000,000. As atAugust 31, 2015, 30,632,531 Class B Non-Voting Shares have been issued under the plan.

The changes in options are as follows:

2015 2014

Number

Weightedaverageexercise

price$ Number


price$

Outstanding, beginning of year 16,477,563 22.34 19,555,441 21.71Granted 2,911,250 28.29 1,633,000 25.76Forfeited (978,528) 25.12 (1,279,330) 22.12Exercised(1) (5,871,621) 21.94 (3,431,548) 20.46

Outstanding, end of year 12,538,664 23.70 16,477,563 22.34

(1) The weighted average Class B Non-Voting Share price for the options exercised was $29.28.

The following table summarizes information about the options outstanding at August 31, 2015:

Options outstanding Options exerciseable

Range of pricesNumber

outstanding

Weightedaverage

remainingcontractual

life


priceNumber

exercisable


price

$16.30 – $19.99 2,696,237 3.89 19.15 2,615,737 19.14$20.00 – $24.99 6,020,777 4.32 23.25 4,611,027 23.30$25.00 – $30.87 3,821,650 8.31 27.61 616,650 26.26

The weighted average estimated fair value at the date of the grant for common share options granted for the year endedAugust 31, 2015 was $2.85 (2014 – $2.61) per option. The fair value of each option granted was estimated on the date of thegrant using the Black-Scholes option pricing model with the following weighted-average assumptions:

2015 2014

Dividend yield 3.96% 4.18%Risk-free interest rate 1.41% 1.61%Expected life of options 6 years 5 yearsExpected volatility factor of the future expected market price of Class B Non-Voting Shares 19.1% 19.6%

Expected volatility has been estimated based on the historical share price volatility of the Company’s Class B Non-VotingShares.



Deferred share unit plan

The Company has a DSU plan for its Board of Directors whereby directors can elect to receive their annual cash compensation,or a portion thereof, in DSUs. In addition, the Company may adjust and/or supplement directors’ compensation with periodicgrants of DSUs. A DSU is a right that tracks the value of one Class B Non-Voting Share. Holders will be entitled to a cashpayout when they cease to be a director. The cash payout will be based on market value of a Class B Non-Voting Share at thetime of payout. When cash dividends are paid on Class B Non-Voting Shares, holders are credited with DSUs equal to thedividend. DSUs do not have voting rights as there are no shares underlying the plan.

During 2015, $2 was recognized as compensation expense (2014 – $3). The carrying value and intrinsic value of DSUs atAugust 31, 2015 was $15 and $13, respectively (August 31, 2014 – $13 and $11, respectively).

Employee share purchase plan

The Company’s ESPP provides employees with an incentive to increase the profitability of the Company and a means toparticipate in that increased profitability. Generally, all non-unionized full time or part time employees of the Company areeligible to enroll in the ESPP. Under the ESPP, eligible employees may contribute to a maximum of 5% of their monthly basecompensation. The Company contributes an amount equal to 25% of the employee’s contributions.

During 2015, $6 was recorded as compensation expense (2014 – $5).

Share appreciation rights

A subsidiary of the Company grants SARs to eligible employees of ViaWest. A SAR entitles the holder to the appreciation invalue of one share of ViaWest over the exercise price over a period of time. SARs granted to ViaWest employees post-acquisitionvest 25% per year over four years, have a 10 year contractual term and are cash settled. During 2015, $4 was recognized ascompensation expense. The carrying value of SARs liabilities, including the SARs granted as partial consideration for theacquisition of ViaWest (see note 3), at August 31, 2015 was $13. At August 31, 2015, no SARs had vested.

18. EARNINGS PER SHARE

Earnings per share calculations are as follows:

2015 2014

Numerator for basic and diluted earnings per share ($)Net income 880 887Deduct: net income attributable to non-controlling interests in subsidiaries (24) (30)Deduct: dividends on Series A Preferred Shares (14) (14)

Net income attributable to common shareholders 842 843

Denominator (millions of shares)Weighted average number of Class A Shares and Class B Non-Voting Shares for basic earnings per share 468 457Effect of potentially dilutive securities(1) 3 2

Weighted average number of Class A Shares and Class B Non-Voting Shares for diluted earnings per share 471 459

Earnings per share ($)Basic 1.80 1.84Diluted 1.79 1.84

(1) The earnings per share calculation does not take into consideration the potential dilutive effect of certain stock optionssince their impact is anti-dilutive. For the year ended August 31, 2015, 2,548,433 options were excluded from thediluted earnings per share calculation (2014 – 1,729,227).



19. DIVIDENDS

Common share dividends

The holders of Class A Shares and Class B Non-Voting Shares are entitled to receive such dividends as the Board of Directorsdetermines to declare on a share-for-share basis, as and when any such dividends are declared or paid. The holders of Class BNon-Voting Shares are entitled to receive during each dividend period, in priority to the payment of dividends on the Class AShares, an additional dividend at a rate of $0.0025 per share per annum. This additional dividend is subject to proportionateadjustment in the event of future consolidations or subdivisions of shares and in the event of any issue of shares by way of stockdividend. After payment or setting aside for payment of the additional non-cumulative dividends on the Class B Non-VotingShares, holders of Class A Shares and Class B Non-Voting Shares participate equally, share for share, as to all subsequentdividends declared.

Preferred share dividends

Holders of the Series A Preferred Shares are entitled to receive, as and when declared by the Company’s Board of Directors, acumulative quarterly fixed dividend yielding 4.50% annually for the initial period ending June 30, 2016. Thereafter, thedividend rate will be reset every five years at a rate equal to the then current 5-year Government of Canada bond yield plus2.00%. Holders of Series A Preferred Shares will have the right, at their option, to convert their shares into CumulativeRedeemable Floating Rate Preferred Shares, Series B (the “Series B Preferred Shares”), subject to certain conditions, onJune 30, 2016 and on June 30 every five years thereafter. The Series B Preferred Shares also represent a series of Class 2preferred shares and holders will be entitled to receive cumulative quarterly dividends, as and when declared by the Company’sBoard of Directors, at a rate set quarterly equal to the then current three-month Government of Canada Treasury Bill yield plus2.00%.

Dividend reinvestment plan

The Company has a Dividend Reinvestment Plan (“DRIP”) that allows holders of Class A Shares and Class B Non-Voting Shareswho are residents of Canada to automatically reinvest monthly cash dividends to acquire additional Class B Non-Voting Shares.Class B Non-Voting Shares distributed under the Company’s DRIP are new shares issued from treasury at a 2% discount fromthe 5 day weighted average market price immediately preceding the applicable dividend payment date.

Dividends declared

The dividends per share recognized as distributions to common shareholders for dividends declared during the year endedAugust 31, 2015 and 2014 are as follows:

2015 2014Class A Voting Share Class B Non-Voting Share Class A Voting Share Class B Non-Voting Share

1.1613 1.1638 1.0775 1.0800

The dividends per share recognized as distributions to holders of Series A Preferred Shares was $1.125 during each of the yearsended August 31, 2015 and 2014.

On June 25, 2015, the Company declared dividends of $0.28125 per Series A Preferred Share which were paid onSeptember 30, 2015. The total amount paid was $3 of which $1 was not recognized as at August 31, 2015.

On October 22, 2015, the Company declared dividends of $0.098542 per Class A Voting Share and $0.09875 per Class BNon-Voting Share payable on each of December 30, 2015, January 28, 2016 and February 26, 2016 to shareholders of recordat the close of business on December 15, 2015, January 15, 2016 and February 12, 2016, respectively.

On October 22, 2015, the Company declared dividends of $0.28125 per Series A Preferred Share payable on December 31,2015 to holders of record at the close of business on December 15, 2015.



20. OTHER COMPREHENSIVE INCOME (LOSS) AND ACCUMULATEDOTHER COMPREHENSIVE LOSS

Components of other comprehensive income and the related income tax effects for 2015 are as follows:

Amount$

Income taxes$

Net$

Items that may subsequently be reclassified to incomeChange in unrealized fair value of derivatives designated as cash flow hedges 8 (2) 6Adjustment for hedged items recognized in the period (8) 2 (6)Unrealized loss on available-for-sale investment (3) – (3)Exchange differences on translation of a foreign operation 184 – 184Exchange differences on translation of US debt hedging a foreign operation (74) – (74)

107 – 107Items that will not be subsequently reclassified to incomeRemeasurements on employee benefit plans 7 – 7

114 – 114

Components of other comprehensive loss and the related income tax effects for 2014 are as follows:

Amount$

Income taxes$

Net$

Items that may subsequently be reclassified to incomeChange in unrealized fair value of derivatives designated as cash flow hedges 3 – 3Adjustment for hedged items recognized in the period (6) 1 (5)Unrealized loss on available-for-sale investment (2) – (2)

(5) 1 (4)Items that will not be subsequently reclassified to incomeRemeasurements on employee benefit plans (58) 16 (42)

(63) 17 (46)

Accumulated other comprehensive loss is comprised of the following:

2015$

2014$

Items that may subsequently be reclassified to incomeUnrealized loss on available-for-sale investment (5) (2)Foreign currency translation adjustments 110 –

Items that will not be subsequently reclassified to incomeRemeasurements on employee benefit plans (124) (131)

(19) (133)



21. OPERATING, GENERAL AND ADMINISTRATIVE EXPENSESAND RESTRUCTURING COSTS

2015$

2014$

Employee salaries and benefits 987 945Purchases of goods and services 2,174 2,092

3,161 3,037

22. OTHER LOSSESOther losses generally includes realized and unrealized foreign exchange gains and losses on US dollar denominated currentassets and liabilities, gains and losses on disposal of property, plant and equipment and minor investments, and the Company’sshare of the operations of Burrard Landing Lot 2 Holdings Partnership. In the current year, the category also includes a write-down of $6 in respect of the property classified as held for sale, distributions of $27 from a venture capital fund investment, awrite-down of $27 in respect of a private portfolio investment and additional proceeds of $15 related to the fiscal 2012 ShawCourt insurance claim while the comparative year includes a refund of $5 from the Canwest CCAA plan implementation fundand proceeds of $6 in respect of the aforementioned insurance claim. In addition, the current and prior year both include assetwrite-downs of $55 and $6, respectively. The write-down of assets in the current year related to assets in respect todevelopment of a certain IPTV platform which the Company has now abandoned.

23. INCOME TAXESDeferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilitiesfor financial reporting purposes and the amounts used for income tax purposes. The Company’s net deferred tax liabilityconsists of the following:

2015$

2014$

Deferred tax assets 14 26Deferred tax liabilities (1,135) (1,105)

Net deferred tax liability (1,121) (1,079)



Significant changes recognized to deferred income tax assets (liabilities) are as follows:

Property, plantand equipmentand software

assets$

Broadcastrights,

licenses,customer

relationships,trademarkand brands

$

Partnershipincome

$

Non-capitalloss carry-forwards

$

Accruedcharges

$

Foreignexchange on

long-term debtand fair valueof derivativeinstruments

$Total

$

Balance at September 1, 2013 (140) (813) (267) 6 73 (1) (1,142)Recognized in statement of income (37) (5) 107 – (19) – 46Recognized in other comprehensive income – – – – 16 1 17

Balance at August 31, 2014 (177) (818) (160) 6 70 – (1,079)Recognized in statement of income (25) (21) 107 34 (33) – 62Recognized on ViaWest business

acquisition (9) (142) – 46 29 – (76)Recognized in other comprehensive

income:Foreign currency translation

adjustments – (29) – 12 1 – (16)Actuarial gains/losses – – – – (12) – (12)

Balance at August 31, 2015 (211) (1,010) (53) 98 55 – (1,121)

The Company has capital loss carryforwards of approximately $61 for which no deferred income tax asset has been recognizedin the accounts. These capital losses can be carried forward indefinitely.

The Company has taxable temporary differences associated with its investment in its subsidiaries. No deferred tax liabilitieshave been provided with respect to such temporary differences as the Company is able to control the timing of the reversal andsuch reversal is not probable in the foreseeable future.

The income tax expense differs from the amount computed by applying the statutory rates to income before income taxes forthe following reasons:

2015$

2014$

Current statutory income tax rate 25.7% 26.0%

Income tax expense at current statutory rates 302 311Net increase (decrease) in taxes resulting from:

Non-taxable portion of capital gains (24) (8)Effect of tax rate changes 34 –Recognition of previously unrecognized tax losses – (1)Other (18) 6

Income tax expense 294 308

Due to foreign operations, the statutory income tax rate for the Company decreased from 26.0% in 2014 to 25.7% in 2015.



The components of income tax expense are as follows:

2015$

2014$

Current income tax expense 356 355Current income tax recovery from recognition of previously unrecognized tax losses – (1)

356 354Deferred tax recovery related to temporary differences (96) (46)Deferred tax expense from tax rate changes 34 –

Income tax expense 294 308

24. BUSINESS SEGMENT INFORMATIONThe Company’s operating segments are Consumer, Business Network Services, Business Infrastructure Services and Media. Theaccounting policies of the segments are the same as those described in the summary of significant accounting policies.Management evaluates divisional performance based on revenue and operating income before charges such as restructuringcosts and amortization. As a result of the restructuring undertaken late in 2014, the Company reorganized its residential andenterprise services, previously included in the Cable and Satellite segments, into Consumer and Business Network Servicessegments, respectively with no change to the Media operating segment. The Consumer division provides Cabletelecommunications services including Video, Internet, WiFi and Digital Phone, and Satellite Video, to Canadian consumers.The Business Network Services segment provides data networking, video, voice and Internet services through a national fibre-optic backbone network and also provides satellite Video services, and fleet tracking services to North American businesses andpublic sector entities. Comparative results have been restated to reflect the new business segments. The Business InfrastructureServices segment was created with the acquisition of ViaWest on September 2, 2014, and provides data centre colocation,cloud and managed services to North American businesses. All of the Company’s operations are substantially located in Canadawith the exception of ViaWest which is located in the United States.

2015$

2014$

RevenueConsumer 3,752 3,768Business Network Services 520 484Business Infrastructure Services 246 –Media 1,080 1,096

5,598 5,348Intersegment eliminations (110) (107)

5,488 5,241Operating income before restructuring costs and amortizationConsumer 1,686 1,669Business Network Services 256 240Business Infrastructure Services 95 –Media 342 353

2,379 2,262Restructuring costs(1) (52) (58)Amortization(1) (895) (765)Operating income 1,432 1,439Interest(1)

Operating 281 264Other/non-operating 2 2

283 266Current taxes(1)

Operating 375 359Other/non-operating (19) (5)

356 354



Capital expenditures

2015$

2014$

Capital expenditures accrual basisConsumer and Business Network Services(2) 870 1,006Business Infrastructure Services 152 –Media 16 18

1,038 1,024

Equipment costs (net of revenue)Consumer and Business Network Services 84 71

Capital expenditures and equipment costs (net)Consumer and Business Network Services(2) 954 1,077Business Infrastructure Services 152 –Media 16 18

1,122 1,095

Reconciliation to Consolidated Statements of Cash FlowsAdditions to property, plant and equipment 939 976Additions to equipment costs (net) 72 56Additions to other intangibles 79 84

Total of capital expenditures and equipment costs (net) per Consolidated Statements of Cash Flows 1,090 1,116Increase (decrease) in working capital and other liabilities related to capital expenditures 49 (7)Decrease in customer equipment financing receivables 12 15Less: Proceeds on disposal of property, plant and equipment (26) (26)Less: Satellite equipment profit(2) (3) (3)

Total capital expenditures and equipment costs (net) reported by segments 1,122 1,095

(1) The Company does not report restructuring costs, amortization, interest or cash taxes on a segmental basis.

(2) The profit from the sale of satellite equipment is subtracted from the calculation of segmented capital expenditures andequipment costs (net) as the Company views the profit on sale as a recovery of expenditures on customer premiseequipment

25. COMMITMENTS AND CONTINGENCIES

Commitments

(i) The Company owns and leases Ku-band and C-band transponders on the Anik F1R, Anik F2 and Anik G1 satellites. Aspart of the Ku-band transponder agreements with Telesat Canada, the Company is committed to paying annualtransponder maintenance and license fees for each transponder from the time the satellite becomes operational for aperiod of 15 years.

(ii) The Company has various long-term operating commitments as follows:

$

2016 6352017 – 2020 948Thereafter 388

1,971



Comprised of: $

Program related agreements 551Lease of transmission facilities, circuits and premises 643Lease and maintenance of transponders 659Exclusive rights to use intellectual property 61Other (primarily maintenance and support contracts) 57

1,971

Included in operating, general and administrative expenses are transponder maintenance expenses of $80 (2014 – $80)and rental expenses of $134 (2014 – $107).

(iii) At August 31, 2015, the Company had capital expenditure commitments in the normal course of business of $23 inrespect of fiscal 2016.

(iv) As part of the CRTC decisions approving the acquisition of the broadcasting businesses in 2012 and 2011, the Companyis required to contribute approximately $182 in new benefits to the Canadian broadcasting system over seven years. Theobligations have been recorded in the income statement at fair value, being the sum of the discounted future net cashflows using appropriate discount rates. At August 31, 2015, the remaining expenditure commitments in respect of theseobligations is $57 which will be funded over future years through fiscal 2019.

(v) In late fiscal 2014, the Company partnered with Rogers to form shomi, a new subscription video-on-demand servicewhich launched in beta in early November 2014. The Company’s remaining capital commitment is $58 of which, $9 wasfunded subsequent to year end.

Contingencies

The Company and its subsidiaries are involved in litigation matters arising in the ordinary course and conduct of its business.Although resolution of such matters cannot be predicted with certainty, management does not consider the Company’s exposureto litigation to be material to these consolidated financial statements.

Guarantees

In the normal course of business the Company enters into indemnification agreements and has issued irrevocable standbyletters of credit and commercial surety bonds with and to third parties.

Indemnities

Many agreements related to acquisitions and dispositions of business assets include indemnification provisions where theCompany may be required to make payment to a vendor or purchaser for breach of contractual terms of the agreement withrespect to matters such as litigation, income taxes payable or refundable or other ongoing disputes. The indemnification periodusually covers a period of two to four years. Also, in the normal course of business, the Company has provided indemnificationsin various commercial agreements, customary for the telecommunications industry, which may require payment by the Companyfor breach of contractual terms of the agreement. Counterparties to these agreements provide the Company with comparableindemnifications. The indemnification period generally covers, at maximum, the period of the applicable agreement plus theapplicable limitations period under law.

The maximum potential amount of future payments that the Company would be required to make under these indemnificationagreements is not reasonably quantifiable as certain indemnifications are not subject to limitation. However, the Companyenters into indemnification agreements only when an assessment of the business circumstances would indicate that the risk ofloss is remote. At August 31, 2015, management believes it is remote that the indemnification provisions would require anymaterial cash payment.

The Company indemnifies its directors and officers against any and all claims or losses reasonably incurred in the performanceof their service to the Company to the extent permitted by law.



Irrevocable standby letters of credit and commercial surety bonds

The Company and certain of its subsidiaries have granted irrevocable standby letters of credit and commercial surety bonds,issued by high rated financial institutions, to third parties to indemnify them in the event the Company does not perform itscontractual obligations. As of August 31, 2015, the guarantee instruments amounted to $4. The Company has not recorded anyadditional liability with respect to these guarantees, as the Company does not expect to make any payments in excess of what isrecorded on the Company’s consolidated financial statements. The guarantee instruments mature at various dates during fiscal2016.

26. EMPLOYEE BENEFIT PLANS

Defined contribution pension plans

The Company has defined contribution pension plans for its non-union employees and certain union employees and, for themajority of these employees, contributes 5% of eligible earnings to the maximum amount deductible under the Income Tax Act.For union employees, the Company contributes amounts up to 9.8% of earnings to the individuals’ registered retirement savingsplans. Total pension costs in respect of these plans were $38 (2014 – $37) of which $26 (2014 – $24) was expensed and theremainder capitalized.

Defined benefit pension plans

The Company has two non-registered retirement plans for designated executives and senior executives and several registeredpension plans for certain employees in the media business. The following is a summary of the accrued benefit liabilitiesrecognized in the statement of financial position.

2015$

2014$

Unregistered plansAccrued benefit obligation 509 493Fair value of plan assets 391 330

118 163Registered plans

Accrued benefit obligation 173 171Fair value of plan assets 172 160

1 11

Accrued benefit liabilities and deficit 119 174

The plans expose the Company to a number of risks, of which the most significant are as follows:

(i) Volatility in market conditions: The accrued benefit obligations are calculated using discount rates with reference to bondyields closely matching the term of the estimated cash flows while many of the assets are invested in other types ofassets. If plan assets underperform these yields, this will result in a deficit. Changing market conditions in conjunctionwith discount rate volatility will result in volatility of the accrued benefit liabilities. To minimize some of the investmentrisk, the Company has established long-term funding targets where the time horizon and risk tolerance are specified.

(ii) Selection of accounting assumptions: The calculation of the accrued benefit obligations involves projecting future cashflows of the plans over a long time frame. This means that assumptions used can have a material impact on thestatements of financial position and comprehensive income because in practice, future experience of the plans may notbe in line with the selected assumptions.



Non-registered pension plans

The Company provides a supplemental executive retirement plan (“SERP”) for certain of its senior executives. Benefits underthis plan are based on the employees’ length of service and their highest three-year average rate of eligible pensionable earningsduring their years of service. In 2012, the Company closed the plan to new participants and amended the plan to freeze basesalary levels at August 31, 2012 for purposes of determining eligible pensionable earnings. The plan was also amended toprovide funding of up to 90% of the accrued benefit obligation over a period of six years. Employees are not required tocontribute to this plan. Subsequent to year end, the Company made contributions of $25 to a Retirement CompensationArrangement Trust (“RCA”).

The Company provides an executive retirement plan (“ERP”) for certain executives not covered by the SERP. Benefits underthis plan are comprised of defined contribution and defined benefit components and are based on the employees’ length ofservice as well as final average earnings during their years of service. Employees are not required to contribute to thisplan. Annually the employer is to fund 90% of the accrued benefit obligation. Subsequent to year end, the Company madecontributions of $2 to an RCA.

The table below shows the change in benefit obligation and funding status and the fair value of plan assets.

SERP$

ERP$

2015Total

$SERP

$ERP

$

2014Total

$

Accrued benefit obligation, beginning of year 487 6 493 404 2 406Current service cost 7 2 9 9 3 12Interest cost 20 – 20 19 – 19Payment of benefits (13) – (13) (10) – (10)Gain on settlement – (1) (1) – – –Remeasurements:

Effect of changes in demographic assumptions (11) – (11) 1 – 1Effect of changes in financial assumptions 1 – 1 51 1 52Effect of experience adjustments 11 – 11 13 – 13

Accrued benefit obligation, end of year 502 7 509 487 6 493

Fair value of plan assets, beginning of year 328 2 330 302 – 302Employer contributions 55 2 57 13 2 15Interest income 14 – 14 15 – 15Payment of benefits (13) – (13) (10) – (10)Return on plan assets, excluding interest income 3 – 3 8 – 8

Fair value of plan assets, end of year 387 4 391 328 2 330

Accrued benefit liability and plan deficit, end of year 115 3 118 159 4 163

The weighted average duration of the defined benefit obligation of the SERP and ERP at August 31, 2015 is 15.3 years and22.5 years, respectively.



The underlying plan assets of the SERP and ERP at August 31, 2015 are invested in the following:

SERP$

ERP$

Cash and cash equivalents 215 2Fixed income securities 93 1Equity securities – Canadian 21 –Equity securities – Foreign 58 1

387 4

All fixed income and equity securities have a quoted price in active market.

The tables below show the significant weighted-average assumptions used to measure the pension obligation and cost for theplans.

Accrued benefit obligation

2015SERP

%

2015ERP%

2014SERP

%

2014ERP%

Discount rate 4.10 4.10 4.00 4.00Rate of compensation increase 5.00(1) 3.00 5.00(1) 3.00

Benefit cost for the year

2015SERP

%

2015ERP%

2014SERP

%

2014ERP%

Discount rate 4.00 4.00 4.75 4.75Rate of compensation increase 5.00(1) 3.00 5.00(1) 3.00

(1) Applies only to incentive compensation component of eligible pensionable earnings.

The calculation of the accrued benefit obligation is sensitive to the assumptions above. A one percentage point decrease in thediscount rate would have increased the accrued benefit obligation at August 31, 2015 by $84. A one percentage point increasein the rate of compensation increase would have increased the accrued benefit obligation by $13.

When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions, the present value of thedefined benefit obligation has been calculated using the projected benefit method which is the same method that is applied incalculating the defined benefit liability recognized in the statement of financial position. The sensitivity analysis presentedabove may not be representative of the actual change in the accrued benefit obligation as it is unlikely that the change inassumptions would occur in isolation of one another as some assumptions may be correlated.

The net pension benefit plan expense, which is included in employee salaries and benefits expense, is comprised of thefollowing components:

SERP$

ERP$

2015Total

$SERP

$ERP

$

2014Total

$

Current service cost 7 2 9 9 3 12Interest cost 20 – 20 19 – 19Interest income (14) – (14) (15) – (15)

Pension expense 13 2 15 13 3 16



Registered pension plans

The Company has a number of funded defined benefit pension plans which provide pension benefits to certain unionized andnon-unionized employees in the media business. Benefits under these plans are based on the employees’ length of service andfinal average salary. These plans are regulated by the Office of the Superintendent of Financial Institutions, Canada inaccordance with the provisions of the Pension Benefits Standards Act and Regulations. The regulations set out minimumstandards for funding the plans.

The table below shows the change in the benefit obligations, change in fair value of plan assets and the funded status of thesedefined benefit plans.

2015$

2014$

Accrued benefit obligation, beginning of year 171 152Current service cost 6 5Interest cost 7 7Employee contributions 1 1Payment of benefits (8) (10)Remeasurements:

Effect of changes in demographic assumptions – 1Effect of changes in financial assumptions (1) 15Effect of experience adjustments (3) –

Accrued benefit obligation, end of year 173 171

Fair value of plan assets, beginning of year 160 133Employer contributions 10 12Employee contributions 1 1Interest income 7 7Payment of benefits (8) (10)Administrative expenses paid from plan assets (1) (1)Return on plan assets, excluding interest income 3 18

Fair value of plan assets, end of year 172 160

Accrued benefit liability and plan deficit, end of year 1 11

The weighted average duration of the defined benefit obligation at August 31, 2015 is 16.3 years.

The plan assets at August 31, 2015 are comprised of investments in pooled funds as follows:

$

Equity – Canadian 46Equity – Foreign 27Fixed income – Canadian 99

172

The underlying securities in the pooled funds have quoted prices in an active market.



The tables below show the significant weighted-average assumptions used to measure the pension obligation and cost for theseplans.

Accrued benefit obligation2015

%2014

%

Discount rate 4.10 4.09Rate of compensation increase 3.00 3.00

Benefit cost for the year2015

%2014

%

Discount rate 4.09 4.84Rate of compensation increase 3.00 3.50

The calculation of the accrued benefit obligation is sensitive to the assumptions above. A one percentage point decrease in thediscount rate would have increased the accrued benefit obligation at August 31, 2015 by $31. A one percentage point increasein the rate of compensation increase would have increased the accrued benefit obligation by $6.

When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions, the present value of thedefined benefit obligation has been calculated using the projected benefit method which is the same method that is applied incalculating the defined benefit liability recognized in the statement of financial position. The sensitivity analysis presentedabove may not be representative of the actual change in the accrued benefit obligation as it is unlikely that the change inassumptions would occur in isolation of one another as some assumptions may be correlated.

The net pension benefit plan expense, which is included in employee salaries and benefits expense, is comprised of thefollowing components:

2015$

2014$

Current service cost 6 5Interest cost 7 7Interest income (7) (7)Administrative expenses 1 1

Pension expense 7 6



Other benefit plans

The Company has post-employment benefits plans that provide post-retirement health and life insurance coverage to certainexecutive level retirees and retirees in the media business and are funded on a pay-as-you-go basis. The table below shows thechange in the accrued post-retirement obligation which is recognized in the statement of financial position.

2015$

2014$

Accrued benefit obligation and plan deficit, beginning of year 18 15Current service cost 2 1Interest cost 1 1Payment of benefits (1) (1)Remeasurements:

Effect of changes in demographic assumptions 2 –Effect of changes in financial assumptions (1) 2Effect of experience adjustments 1 –

Accrued benefit obligation and plan deficit, end of year 22 18

The weighted average duration of the benefit obligation at August 31, 2015 is 17.6 years.

The post-retirement benefit plan expense, which is included in employee salaries and benefits expense, is $3 (2014 – $2) andis comprised of current service and interest cost.

The discount rates used to measure the post-retirement benefit cost for the year and the accrued benefit obligation as atAugust 31, 2015 were 4.00% and 4.20%, respectively (2014 – 4.75% and 4.00%, respectively). A one percentage pointdecrease in the discount rate would have increased the accrued benefit obligation at August 31, 2015 by $4.

Employer contributions

The Company’s estimated contributions to the defined benefit plans in fiscal 2016 are $37.

27. RELATED PARTY TRANSACTIONSControlling shareholder

The majority of the Class A Shares are indirectly held by the Shaw Family Living Trust (“SFLT”). The sole trustee of SFLT is aprivate company owned and controlled by JR Shaw and has a Board of Directors which includes JR Shaw and members of hisfamily (the “Shaw Family Group”). The Shaw Family Group includes Directors and Senior Executive and Corporate Officers ofthe Company.



Significant investments in subsidiaries

The following are the significant subsidiaries of the Company, all of which are incorporated or formed in Canada with theexception of ViaWest, Inc. which is incorporated in the United States.

Ownership InterestAugust 31,

2015August 31,

2014

Shaw Cablesystems Limited 100% 100%Shaw Cablesystems G.P. 100% 100%Shaw Envision Inc. 100% 100%Shaw Telecom Inc. 100% 100%Shaw Telecom G.P. 100% 100%Shaw Satellite Services Inc. 100% 100%Star Choice Television Network Incorporated 100% 100%Shaw Satellite G.P. 100% 100%Shaw Media Inc. 100% 100%Shaw Television Limited Partnership 100% 100%ViaWest, Inc. 100% –

Key management personnel and Board of Directors

Key management personnel consist of the most senior executive team and along with the Board of Directors have the authorityand responsibility for planning, directing and controlling the activities of the Company.

Compensation

The compensation expense of key management personnel and Board of Directors is as follows:

2015$

2014$

Short-term employee benefits 38 42Post-employment pension benefits 15 17Retirement benefits 17 –Share-based compensation 1 3

71 62

Transactions

The Company paid $2 (2014 – $2) for collection, installation and maintenance services to a company controlled by a Directorof the Company.

During the year, the Company paid $6 (2014 – $7) for remote control units to a supplier where Directors of the Company holdpositions on the supplier’s board of directors.

During the year, network fees of $12 (2014 – $12) were paid to a programmer where a Director of the Company holds aposition on the programmer’s board of directors.

At August 31, 2015, the Company had $3 owing in respect of these transactions (2014 – $3).



Other related parties

The Company has entered into certain transactions and agreements in the normal course of business with certain of its relatedparties. These transactions are measured at the exchange amount, which is the amount of consideration established and agreedto by the related parties.

Corus

The Company and Corus are subject to common voting control. During the year, network fees of $113 (2014 – $120),advertising fees of $1 (2014 – $1) and programming fees of $1 (2014 – $1) were paid to various Corus subsidiaries andentities subject to significant influence. In addition, the Company provided administrative, advertising and other services for $1(2014 – $1), uplink of television signals for $6 (2014 – $5), Internet services and lease of circuits for $1 (2014 – $1) andprogramming content of $2 (2014 – $1). At August 31, 2015, the Company had a net of $18 owing in respect of thesetransactions (2014 – $20) and commitments in respect of network program agreements of $7 which are included in theamounts disclosed in note 25.

The sale of the Company’s two French-language channels, Historia and Series+, to Corus closed in 2014 (see note 3). Inconjunction with the closing, the Company settled the non-interest bearing promissory note of $48 that was owing to Corus inrespect of ABC Spark and Food Canada Network transactions that had closed in 2013.

The Company provided Corus with television advertising spots in return for radio and television advertising. No monetaryconsideration was exchanged for these transactions and no amounts were recorded in the accounts.

Burrard Landing Lot 2 Holdings Partnership

During the year, the Company paid $12 (2014 – $10) to the Partnership for lease of office space in Shaw Tower. Shaw Tower,located in Vancouver, BC, is the Company’s headquarters for its lower mainland operations. At August 31, 2015, the Companyhad a remaining commitment of $93 in respect of the office space lease which is included in the amounts disclosed in note25.

Joint arrangement

During the year, the Company providing programming content and advertising services of $18 and paid $6 in subscriber fees.At August 31, 2015, the Company had a net receivable of $3 in respect of these transactions.

28. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

Fair values

The fair value of financial instruments has been determined as follows:

(i) Current assets and current liabilities

The fair value of financial instruments included in current assets and current liabilities approximates their carrying valuedue to their short-term nature.

(ii) Investments and other assets and Other long-term assets

The fair value of publicly traded investments is determined by quoted market prices. Investments in private entitieswhich do not have quoted market prices in an active market and whose fair value cannot be readily measured are carriedat cost. No published market exists for such investments. These equity investments have been made as they areconsidered to have the potential to provide future benefit to the Company and accordingly, the Company has no currentintention to dispose of these investments in the near term. The fair value of long-term receivables approximates theircarrying value as they are recorded at the net present values of their future cash flows, using an appropriate discountrate.



(iii) Long-term debt

The carrying value of long-term debt is at amortized cost based on the initial fair value as determined at the time ofissuance or at the time of a business acquisition. The fair value of publicly traded notes is based upon current tradingvalues. The fair value of finance lease obligations is determined by discounting future cash flows using a rate for loanswith similar terms, conditions and maturity dates. The carrying value of bank credit facilities approximates fair value asthe debt bears interest at rates that fluctuate with market rates. Other notes and debentures are valued based uponcurrent trading values for similar instruments.

(vi) Other long-term liabilities

The fair value of program rights payable, estimated by discounting future cash flows, approximates their carrying value.The fair value of contingent consideration arising from a business acquisition is determined by calculating the presentvalue of the probability weighted assessment of the likelihood that revenue targets will be met and the estimated timingof such payments.

(v) Derivative financial instruments

The fair value of US currency forward purchase contracts is determined using an estimated credit-adjusted mark-to-market valuation using observable forward exchange rates at the end of reporting periods and contract forward rates.

The carrying values and estimated fair values of an investment in a publicly traded company, long-term debt and acontingent liability are as follows:

August 31, 2015 August 31, 2014Carrying

value$

Estimatedfair value

$

Carryingvalue

$

Estimatedfair value

$

AssetsInvestment in publicly traded company(1) 4 4 7 7

LiabilitiesLong-term debt (including current portion)(2) 5,669 6,307 4,690 5,390Contingent liability(3) 2 2 – –

(1) Level 1 fair value – determined by quoted market prices.

(2) Level 2 fair value – determined by valuation techniques using inputs based on observable market data, either directly orindirectly, other than quoted prices.

(3) Level 3 fair value – determined by valuation techniques using inputs that are not based on observable market data.

Risk management

The Company is exposed to various market risks including currency risk and interest rate risk, as well as credit risk and liquidityrisk associated with financial assets and liabilities. The Company has designed and implemented various risk managementstrategies, discussed further below, to ensure the exposure to these risks is consistent with its risk tolerance and businessobjectives.

Market risk

Market risk is the risk that the fair value or cash flows of a financial instrument will fluctuate as a result of changes in marketprices, including foreign exchange and interest rates, the Company’s share price and market price of publicly tradedinvestments.



Currency risk

Certain of the Company’s capital expenditures and equipment costs in respect of its Canadian operations are incurred in USdollars, while its revenue is primarily denominated in Canadian dollars. Decreases in the value of the Canadian dollar relative tothe US dollar could have an adverse effect on the Company’s cash flows. To mitigate some of the uncertainty in respect ofcapital expenditures and equipment costs, the Company regularly enters into forward contracts in respect of US dollarcommitments. With respect to 2015, the Company entered into forward contracts to purchase US $100 over a period of 10months commencing in November 2014 at an average exchange rate of 1.1586 Cdn. At August 31, 2015 the Company had noforward contracts in respect of US dollar commitments.

The Company’s net investment in its foreign operation is exposed to market risk attributable to fluctuations in foreign currencyexchange rates in respect of changes in the value of the Canadian dollar versus the US dollar. This risk is partially mitigated asa portion of the purchase price of ViaWest was borrowed in US dollars under the Company’s credit facility. At August 31, 2015,the investment in ViaWest amounted to US $812. The exchange rate used to convert US dollars into Canadian dollars for thestatement of financial position at August 31, 2015 was $1.3157 Cdn. The impact of a 10% change in the exchange rate wouldchange other comprehensive income by $63.

Interest rate risk

Due to the capital-intensive nature of its operations, the Company utilizes long-term financing extensively in its capitalstructure. The primary components of this structure are a banking facility and various Canadian senior notes with varyingmaturities issued in the public markets as more fully described in note 13.

Interest on the Company’s unsecured banking facility and ViaWest’s credit facilities are based on floating rates, while the seniornotes are primarily fixed-rate obligations. The Company utilizes its banking facility to finance day-to-day operations and,depending on market conditions, periodically converts the bank loans to fixed-rate instruments through public market debtissues. As at August 31, 2015, 78% of the Company’s consolidated long-term debt was fixed with respect to interest rates.

Sensitivity analysis

The Company held no foreign exchange forward contracts at August 31, 2015. A portion of the Company’s accounts receivableand accounts payable and accrued liabilities in respect of its Canadian operations is denominated in US dollars; however, dueto their short-term nature, there is no significant market risk arising from fluctuations in foreign exchange rates.

Interest on the Company’s banking and credit facilities are based on floating rates and the variable rate senior notes are basedon CDOR. There is no significant market risk arising from interest rates fluctuating by reasonably possible amounts from theiractual values at August 31, 2015.

A change of one dollar in the market price per share of the Company’s publicly traded investment would change othercomprehensive loss by $1 at August 31, 2015.

At August 31, 2015, a one dollar change in the Company’s Class B Non-Voting Shares would not have had an impact on netincome in respect of the Company’s DSU plan.

Credit risk

Accounts receivable in respect of the Consumer, Business Networks Services and Business Infrastructure Services divisions arenot subject to any significant concentrations of credit risk due to the Company’s large and diverse customer bases. For theMedia division, a significant portion of sales are made to advertising agencies which results in some concentration of credit risk.At August 31, 2015, approximately 72% (2014 – 61%) of the $186 (2014 – $201) of advertising receivables is due from theten largest accounts. The largest amount due from an advertising agency is $20 (2014 – $20) which is approximately 11%(2014 – 10%) of advertising receivables. As at August 31, 2015, the Company had accounts receivable of $468 (August 31,2014 – $493), net of the allowance for doubtful accounts of $26 (August 31, 2014 – $32). The Company maintains anallowance for doubtful accounts for the estimated losses resulting from the inability of its customers to make requiredpayments. In determining the allowance, the Company considers factors such as the number of days the customer account ispast due, whether or not the customer continues to receive service, the Company’s past collection history and changes inbusiness circumstances. As at August 31, 2015, $121 (August 31, 2014 – $129) of accounts receivable is considered to be



past due, defined as amounts outstanding past normal credit terms and conditions. Uncollectible accounts receivable arecharged against the allowance account based on the age of the account and payment history. The Company believes that itsallowance for doubtful accounts is sufficient to reflect the related credit risk.

The Company mitigates the credit risk of advertising receivables by performing initial and ongoing credit evaluations ofadvertising customers. Credit is extended and credit limits are determined based on credit assessment criteria and creditquality. In addition, the Company mitigates credit risk of subscriber receivables through advance billing and procedures todowngrade or suspend services on accounts that have exceeded agreed credit terms and routinely assesses the financialstrength of its business customers through periodic review of payment practices.

Credit risks associated with US currency contracts arise from the inability of counterparties to meet the terms of the contracts.In the event of non-performance by the counterparties, the Company’s accounting loss would be limited to the net amount thatit would be entitled to receive under the contracts and agreements. In order to minimize the risk of counterparty default underits swap agreements, the Company assesses the creditworthiness of its swap counterparties.

Liquidity risk

Liquidity risk is the risk that the Company will experience difficulty in meeting obligations associated with financialliabilities. The Company manages its liquidity risk by monitoring cash flow generated from operations, available borrowingcapacity, and by managing the maturity profiles of its long-term debt.

The Company’s undiscounted contractual maturities as at August 31, 2015 are as follows:

Accountspayable and

accruedliabilities(1)

$

Otherlong-termliabilities

$

Long-termdebt


$

Interestpayments

$

Within one year 887 – 609 2961 to 3 years – 19 417 5263 to 5 years – 2 1,705 461Over 5 years – – 2,995 2,042

887 21 5,726 3,325

(1) Includes accrued interest and dividends of $229.



29. CONSOLIDATED STATEMENTS OF CASH FLOWSAdditional disclosures with respect to the Consolidated Statements of Cash Flows are as follows:

(i) Funds flow from operations

2015$

2014$

Net income 880 887Adjustments to reconcile net income to funds flow from operations:Amortization 899 768Program rights 15 (10)Deferred income tax recovery (62) (46)CRTC benefit obligation funding (31) (58)Gain on sale of media assets [note 3] – (49)Share-based compensation 4 3Defined benefit pension plans (45) (5)Accretion of long-term liabilities and provisions 3 6Equity loss of a joint venture 56 –Gain on sale of wireless spectrum licenses [note 3] (158) –Impairment of goodwill [note 10] 15 –Debt retirement costs [note 13] – 8Write-down of assets [note 22] 55 6Write-down of property held for sale [note 22] 6 –Write-down of investment [note 22] 27 –Distributions from a venture capital fund investment [note 22] (27) –Other – 14

Funds flow from operations 1,637 1,524

(ii) Interest and income taxes paid and interest and distributions received and classified as operating activities are as follows:

2015$

2014$

Interest paid 283 283Income taxes paid (net of refunds) 488 137Interest received 2 5

(iii) Non-cash transactions

The Consolidated Statements of Cash Flows exclude the following non-cash transactions:

2015$

2014$

Issuance of Class B Non-Voting Shares:Dividend reinvestment plan [note 19] 166 146

Non-monetary exchange:Exchange of fibre assets for network capacity leases – 5

Lease transactions 2 5



30. CAPITAL STRUCTURE MANAGEMENTThe Company’s objectives when managing capital are:

(i) to maintain a capital structure which optimizes the cost of capital, provides flexibility and diversity of funding sourcesand timing of debt maturities, and adequate anticipated liquidity for organic growth and strategic acquisitions;

(ii) to maintain compliance with debt covenants; and

(iii) to manage a strong and efficient capital base to maintain investor, creditor and market confidence.

The Company defines capital as comprising all components of shareholders’ equity (other than non-controlling interests andamounts in accumulated other comprehensive income/loss), long-term debt (including the current portion thereof), and bankindebtedness less cash and cash equivalents.

August 31, 2015$

August 31, 2014$

Cash and cash equivalents (398) (637)Long-term debt repayable at maturity 5,726 4,740Share capital 3,500 3,182Contributed surplus 45 64Retained earnings 1,883 1,589

10,756 8,938

The Company manages its capital structure and makes adjustments to it in light of changes in economic conditions and the riskcharacteristics of underlying assets. The Company may also from time to time change or adjust its objectives when managingcapital in light of the Company’s business circumstances, strategic opportunities, or the relative importance of competingobjectives as determined by the Company. There is no assurance that the Company will be able to meet or maintain its currentlystated objectives.

On December 5, 2014 Shaw received the approval of the TSX to renew its normal course issuer bid to purchase its Class BNon-Voting Shares for a further one year period. The Company is authorized to acquire up to 20,000,000 Class B Non-VotingShares during the period December 9, 2014 to December 8, 2015.

The Company’s credit facilities are subject to covenants which include maintaining minimum or maximum financial ratios,including total debt to operating cash flow/adjusted earnings before interest, taxes, depreciation and amortization, andoperating cash flow to fixed charges. At August 31, 2015, the Company is in compliance with these covenants and based oncurrent business plans and economic conditions, the Company is not aware of any condition or event that would give rise tonon-compliance with the covenants.

The Company’s overall capital structure management strategy remains unchanged from the prior year.

31. SUBSEQUENT EVENTOn November 16, 2015, ViaWest entered into an agreement to acquire 100% of the outstanding shares in INetU, Inc. for US$162. INetU, Inc. is a solutions provider for public, private and hybrid cloud environments in addition to offering managedsecurity and compliance services. The transaction is expected to close by December 31, 2015.


Shaw Communications Inc.Shareholders’ InformationAugust 31, 2015

Share Capital and Listings

The Company is authorized to issue a limited number of Class A participating and an unlimited number of Class B Non-Votingparticipating shares. The authorized number of Class A Shares is limited, subject to certain exceptions, to the lesser of thatnumber of such shares (i) currently issued and outstanding; and (ii) that may be outstanding after any conversion of Class AShares into Class B Non-Voting Shares. At August 31, 2015, the Company had 22,420,064 Class A Shares and 451,471,562Class B Non-Voting Shares outstanding. The Class A Shares are listed on the TSX Venture Stock Exchange under the symbolSJR.A. The Class B Non-Voting Shares are listed on the Toronto Stock Exchange under SJR.B and on the New York StockExchange under the symbol SJR. The Series A Preferred Shares are listed on the Toronto Stock Exchange under the symbolSJR.PR.A.

Trading Range of Class B Non-Voting Shares on the Toronto Stock Exchange

Quarter High Close Low CloseTotal

Volume

September 1, 2014 to August 31, 2015First 30.89 26.92 55,482,111Second 31.67 29.00 64,805,109Third 29.30 26.65 56,992,470Fourth 27.92 25.84 66,995,470

Closing price, August 31, 2015 26.43

Share Splits

There have been four splits of the Company’s shares; July 30, 2007 (2 for 1), February 7, 2000 (2 for 1), May 18, 1994 (2 for1), and September 23, 1987 (3 for 1). In addition, as a result of the Arrangement referred to in the Management InformationCircular dated July 22, 1999, a Shareholder’s Adjusted Cost Base (ACB) was reduced for tax purposes.


Shaw Communications Inc.Corporate InformationAugust 31, 2015

DIRECTORS

JR Shaw(4)

Executive ChairShaw Communications Inc.

Peter J. BissonnetteCorporate Director

Adrian L. Burns(3)(4)

Corporate Director

George F. Galbraith(1)

Corporate Director

Dr. Richard R. Green(1)

Corporate Director

Dr. Lynda Haverstock(2)

Corporate Director

Gregory John Keating(2)

Chairman and ChiefExecutive OfficerAltimax Venture Capital

Michael W. O’Brien(1)(4)

Corporate Director

Paul K. Pew(3)(4)

Co-Founder and Co-CEOG3 Capital Corp.

Jeffrey C. Royer(1)

Private Investor

Bradley S. Shaw(4)

Chief Executive OfficerShaw Communications Inc.

Jim ShawVice ChairShaw Communications Inc.

JC Sparkman(2)(4)

Corporate Director

Carl E. Vogel(3)

Private Investor; Senior Advisor toDISH Network

Sheila C. Weatherill(3)

Corporate Director

Willard (Bill) H. Yuill(2)

Chairman and ChiefExecutive OfficerThe Monarch Corporation

(1) Audit Committee(2) Human Resources and Compensation

Committee(3) Corporate Governance and

Nominating Committee(4) Executive Committee

SENIOR OFFICERS

JR ShawExecutive Chair

Jim ShawVice Chair

Bradley S. ShawChief Executive Officer

Jay MehrExecutive Vice President& Chief Operating Officer

Vito CulmoneExecutive Vice President &Chief Financial Officer

Barbara WilliamsExecutive Vice President,Broadcasting & President,Shaw Media

Chris KucharskiSenior Vice President, Consumer

Ron McKenzieSenior Vice President, Business

Nancy PhillipsPresident & Chief ExecutiveOfficer, ViaWest

Jim LittleSenior Vice President & ChiefMarketing Officer

Peter A. JohnsonSenior Vice President, GeneralCounsel & Corporate Secretary

Trevor EnglishSenior Vice President, CorporateDevelopment and BusinessPlanning

Morgan ElliottSenior Vice President, Regulatoryand Government Relations

Arnaud RobertSenior Vice President, StrategicInitiatives

Zoran StakicSenior Vice President & ChiefTechnology Officer

CORPORATE OFFICEShaw Communications Inc.Suite 900, 630 – 3rd Avenue S.W.,Calgary, AlbertaCanada T2P 4L4Phone: (403) 750-4500Website: www.shaw.ca

CORPORATE GOVERNANCEInformation concerning Shaw’scorporate governance policies arecontained in the InformationCircular and is also available onShaw’s website, www.shaw.ca

Information concerning Shaw’scompliance with the corporategovernance listing standards of theNew York Stock Exchange isavailable in the investors sectionon Shaw’s website, www.shaw.ca

INTERNET HOME PAGEShaw’s Annual Report, AnnualInformation Form, QuarterlyReports, Press Releases and otherrelevant investor information areavailable electronically on theInternet at www.shaw.ca

AUDITORSErnst & Young LLP

PRIMARY BANKERThe Toronto-Dominion Bank

TRANSFER AGENTSCST Trust Company, Calgary, ABPhone: 1-800-387-0825

DEBENTURE TRUSTEEComputershare TrustCompany of Canada100 University Avenue,9th FloorToronto, ON M5J [email protected] : 1-800-564-6253

FURTHER INFORMATIONFinancial analysts, portfoliomanagers, other investors andinterested parties may contact theCompany at (403) 750-4500 orvisit Shaw’s website atwww.shaw.ca for furtherinformation.

To receive additional copies of thisAnnual Report, please fax yourrequest to (403) 750-7469 oremail [email protected]

All trademarks used in this annualreport are the property of Shaw orused under licence.


2015 Annual Report